How to drive game-changing efficiencies in HR planning and forecasting
Date: 17/02/2017

By Piers Wilson

It has long been the case that payroll can make or break a business. CFOs know that HR costs must be closely monitored to ensure that it remains in a reasonable balance - in the 15-30% of gross revenue range. 

According to PricewaterhouseCoopers, direct HR costs alone can average 25%. From a planning and forecasting perspective, any inaccuracies around such a significant cost and what is contributing to it can equate to a major hit to profitability - no matter how successful you might be from a revenue viewpoint.

Fast forward to today and the pressure to properly manage this expense has become even more intense. Businesses are being forced to become far more strategic as they face the introduction of new, disruptive technologies rapidly changing their competitive environment. In such a turbulent context, accurate planning and forecasting around your fundamentals has never been more important to long-term business survival. According to a 2016 study, “Redefining Performance” from IBM, savvy CEOs are increasingly turning to their CFOs to provide the deep financial insights and accurate forecasts they need to respond proactively.

What to do. Take the long view.png

Image credit: Redefining Performance, Insights from teh Global C-suite Study - The CFO perspecitve (page 7)

And yet despite this, the importance of accurate, efficient and reliable HR budgeting and forecasting has not to date inspired much innovation. Many organisations still suffer a disjointed and painfully inefficient Excel-driven process.

Ultimately, long hours of manual work budgeting and forecasting are too often not being rewarded, but actually penalised - with avoidable reductions in profitability. However, it is possible to eliminate the typical headaches around having cost centre managers filling in templates, inconsistent manual review processes, missing or wrongly allocated headcount, and headcount to cost of revenue ratios being skewed.

Relieve stress from HR planning and forecasting and ensure organisational wide collaborative decision making with PM2Plan

PM2Plan's innovative driver-based HR module addresses process shortcomings by adding game-changing automation, transparency, and accuracy to your HR planning and forecasting - making it simpler, faster, more detailed and less prone to error. The solution promotes alignments between your HR teams and cost centre managers as they work together with a single source of truth, bringing a powerful and timely strategic planning tool into your arsenal.

The HR module comes built into PM2Plan, and is powered by IBM Planning Analytics - the next generation of TM1.

Want to know more? Here are just a few of the benefits:

Set assumptions: With PM2Plan’s HR module, management can set assumptions that link overall business growth or contraction to headcount and other resources. For example, for every $100,000 increase in revenue, you may need one more person in sales, or for every $500k increase, we need one additional headcount in shared services.

Achieve alignment: Have management dictate what the overall increase is in the operating costs of resources, letting cost centre managers come together with HR to look at a single source of truth. Instead of arguing over numbers, improve collaboration and start making strategic decisions about how to split those resources across their cost centres.

Get good governance: Red flags are built in to let you know when there’s an anomaly you should be aware of.

Reporting: Get helpful data visualisations for key decision makers without manual effort, easily increasing transparency on headcount growth, FTE, employee demographics and more.

Best in class security: IBM’s TM1 technology is versatile and flexible, enabling you to maintain maximum privacy for sensitive payroll-related information by placing the technology on a separate server with separate access while still allowing it to hook into your other modules.

Minimise accuracy issues: In Excel, accuracy issues can be rampant and collaboration is hindered. Achieve innovation and real time insightful decision making from a single source of truth.


Discover how PM2Plan can create valuable advantages for your business. 

Contact us to learn more.



You may also be interested in these articles:

How Leading CFOs are Learning to Thrive amidst Digital Disruption

Redefining Performance: Insights from the Global C-suite Study - The CFO perspective, IBM Institute for Business Value

Ready to move on from your Love/Hate relationship (with spreadsheets)?