Energy & Utilities

Adaptive Planning provides energy and utility companies with a Corporate Performance Management system that includes multi-dimensional, driver-based modeling capabilities, and integrated P&L and cash flow planning and reporting.

Planning & Reporting Challenges

The energy and utilities industry faces a myriad of issues, including governmental policy shifts and new environmental regulation, fluctuating consumer demand, price volatility, emerging competitive forces, and cash flow challenges.

Energy and utility planning challenges include planning for corporate growth as customer demand changes, and matching demand (e.g., kilowatt hour, gallons, cubic feet, tons), which drives revenue, and supply (e.g., leased rates, purchased or produced energy, mined coal), which drives costs. Cost planning also includes detailed projections of personnel, in multiple categories.

Especially in this environment, cash-constrained energy and utility companies require a planning and reporting system that delivers accuracy, data integrity, timely access to key operating and financial metric, and the ability to frequently reforecast and perform what-if analyses. They must be able to manage expenses and capital requirements, monitor variances, and establish management accountability. Spreadsheet-based systems are inefficient, error-prone, and fundamentally unsuited for the complex, dynamic planning and reporting required by energy and utility companies.

The Adaptive Planning Solution

Financial planning and analysis in the energy and utility environment, then, requires a flexible budgeting, forecasting, and reporting solution with the ability to:

• Efficiently manage and coordinate revenue and cost planning in relevant units, driving an integrated financial plan, with the capability to run what-if scenarios
• Provide driver-based planning
• Integrate P&L with balance sheet/cash flow planning
• Report on key metrics necessary for decision-making, and on variance detail for analysis

Adaptive Planning has been successful helping dozens of energy and utility companies streamline their planning and analysis, because it has allowed them to:

• Use driver-based planning for sales, with units such as kilowatt hour, gallons, cubic feet, tons of coal, and pricing that can vary across customers or geography, or even within large customers by contract
• Use driver-based planning for costs, including such variables as leased rates, and purchased or produced energy
• Plan multiple categories of employee expenses, such as direct and indirect labor, union and non-union pay grades, and plan for multiple shifts, turnover, and workforce redundancy
• Plan variable and fixed costs, with variable costs tied to cost units and direct labor, and fixed overhead costs derived from history or activity-based cost forecasting
• Analyze profit margins across dimensions such as commercial, industrial and residential customers, and geographies
• Model integrated P&L, balance sheet, and cash flow statements, with effects of demand, supply, and capital spending on available cash
• Use dashboards to manage key performance metrics, including rates, usage, price, and energy charges
• Perform what-if scenario analysis, e.g., for various billing rate schedules, to analyze the impact on revenue and the bottom line.
• Use reports to perform variance analysis, including drill-down into underlying transaction detail from other systems
• Distribute report books via email for financial presentations such as board packages and executive reporting

Furthermore, Adaptive Planning’s Software as a Service (SaaS) model is a natural fit for the energy and utility industry, for the following reasons:

• It provides exceptional value. Adaptive Planning’s SaaS solution provides a five-year ROI of up to 650% compared to using spreadsheets, and has a total cost of ownership that’s up to 77% less than on-premise alternatives. And it’s low-risk, with the options of free trials and phased implementations.
• There is no IT involvement required. As a SaaS solution, no new hardware, software, or IT support is required for initial implementation or ongoing maintenance.
• It’s intuitive and easy to use. Adaptive Planning’s SaaS infrastructure and CPM engine save time and effort with built-in intelligence. Customers can avoid the wasted time associated with spreadsheet-based systems. And its web-based, highly-customizable, Excel-like interface is easy for all types of employees throughout a company to learn and use.

Select energy and utility customers include: