Carl Seidman

Carl Seidman is a trusted and disciplined advisor specializing in financial strategy and business transformation. He has dedicated his career to guiding healthy companies through strategic growth and aiding stagnant, under-performing, and distressed companies through turnaround or revitalization.

He is a highly sought-after keynote speaker and trainer in the field of FP&A, business modeling, and Millennial career development.

Carl is a CPA and possesses other professional credentials in insolvency and restructuring, valuation, fraud, and financial forensics.

Author's Articles

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Corporate FP&A Done Right

By Carl Seidman, Principal, Seidman Global LLC

FP&A Tags: 

According to recent findings by CFO Magazine, Chief Financial Officers are increasingly disappointed with the return on investment received from their financial planning & analysis (FP&A) function.   This is no surprise.  Companies that don’t get the most from their FP&A functions tend to focus meticulously on accounting data, its presentation, and what the numbers mean.  While data accuracy is critical to successful data-driven analytics, HOW that information is used is what differentiates an exceptional return on FP&A investment from a modest one.

When companies put greater weight on what the numbers mean, they often rely more heavily on financial reporting and perceive FP&A as a ‘nice to have’.  But it’s quite the contrary.  FP&A should be used to assist company leadership in problem-solving, risk management, and growth planning including the following:

  • Anticipate forthcoming decisions
  • Evaluate “what-if” scenarios and contingencies
  • Contrast new insights with conventional wisdom

The reasons leadership doesn’t use FP&A to its full potential (or at all) is three-fold:

  • A lack of trust in data
  • A poor understanding of how to interpret and use financial information
  • A culture of pervasive, gut-instinct decision-making

Lack of Trust

An overwhelming number of decision-makers interpret data incorrectly because of bad information.  The adage of garbage in, garbage out rings true here and leads to leadership getting continuously burned.  The fault often lies with inaccurate, untimely, or irrelevant financial reporting stemming from poor systems and unqualified personnel.

If the rubbish output becomes a chronic issue, leadership will adapt to making decisions without data – a logical, but dangerous response.  If and when the company realizes success, over time, leadership may begin to rationalize:  “We’ve gotten this far without access to good data, so we must be doing something right.”  

Poor Understanding of How to Interpret and Use Financial Information

Most owners tend not to come from deep financial backgrounds but possess enough knowledge to understand financial health and what’s going on in their businesses.  But there’s a major difference between having an objective understanding of the finances and creatively knowing how to use the information in making future decisions.   Often it isn’t that leadership doesn’t see a need for FP&A; they have a poor understanding of how to interpret and use financial information and therefore don’t know how to build a function to support it.

Pervasive Gut-Instinct Decision-Making

Business builders can be a confident bunch.  When a business grows and profitability increases, it gives decision-makers the impression they’re on the right track.  Echoing the above, they explain: “We’ve gotten this far, so we must be doing something right.”  There is a tendency to be self-assured, often deceptively, in their abilities to interpret figures and make smart decisions.  Who needs FP&A when gut-instinct has proved effective?

The combination of a lack of trust in data, poor understanding of how to interpret and use financial information, and over-confidence gained from prior wins results in misuse of available information and poor decision-making.

Truth and Consequences

Historical achievements are not always a signal of future success.  Accomplishments of the past may give rise to risks and competitive interference never previously seen.  A ‘shoot-from-the-hip’ mentality will eventually lead to disastrous consequences – some recoverable, some not.  However, intuition, when combined with financial intelligence and analysis, lowers risk exposure and gives rise to better decisions.  FP&A is not meant to replace the experience and instinctual nature of leadership; it’s meant to complement it. 

First, the CFO, Finance VP, or Controller professional must build out the enterprise resource planning (ERP) system or financial platforms to ensure information is timely and accurate.  Those responsible for generating the numbers should not only understand what they are gathering and reporting, but why they are doing it and how it will be used for making important decisions.  This may introduce a cultural shift that should be reinforced by training, coaching, and demonstration of its importance.  Without trust in the information, leaders won’t use it and will instead rely on their intuition.  

Second, instead of relying extensively on objective financial reporting, the business must adopt a more subjective, forward-looking mindset.  It is a move from being reactive to proactive.  FP&A should readily be able to provide an all-inclusive view of the business and where it might go.  Analyses of near-term and future decisions should be conducted with ‘what-if’ outcomes reflecting alternatives and uncertainties.  Evaluation of these scenarios should be considered mandatory, not just a ‘nice-to-have’.  Outputs generated from FP&A will assist in more credible negotiations and discussions with lenders, venders, customers, and other stakeholders. 

Making Educated Decisions

Business leaders should beware of overzealousness and believing what got them here will get them there.  Complacency, aimless strategy, and poor decisions can all lead to missed opportunities, stagnation, or distress.  We’ve witnessed in countless instances the damage caused by a lack of foresight and failure to react to changing circumstances.   A strong FP&A function emboldens leadership to make educated decisions rooted in genuine information well in advance.   In its absence, decision-makers place greater faith on back-of-the-envelope calculations and gut instinct.  No doubt, the shift from reactive to proactive thinking takes courage and investment, but it supports the businesses’ ability to be nimble and avert future pitfalls.

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Data Visualization and Storytelling in FP&A

By Carl Seidman, Principal, Seidman Global LLC

The purpose of financial planning and analysis is not to build perfect forecasts and financial solutions. The purpose is simply to make better business decisions. Numbers themselves can support decision-making but the story is what convinces people to make the right decision. Because many leaders are often not financial thinkers, it's critical for FP&A professionals to know how their analysis and recommendations can be presented in a way that non-financial professionals can understand. This article will discuss best practices in data visualization that resonates with financial and non-financial people alike.
 
Business intelligence software is easy-to-use, affordable, and offers an alternative to running filtered pivot tables and pivot charts in Excel. The incorporation of data visualization platforms, such as Tableau, Qlik, and Power BI, are revolutionizing the ways in which financial information is presented. It is our responsibility as FP&A professionals to inform the people who rely on our information to the extent it serves their needs and as well as possible. We shouldn’t provide the audience with only a partial understanding, nor should we overcomplicate and overwhelm them. We need to present what’s most important.  
 
While effective communication is often in job descriptions, requirements for formal training in data visualization is generally not in most job descriptions.  It’s also rare to come across a university curriculum that addresses how to appropriately build graphs, charts, and other visuals for data presentation.  Because this isn’t an area where most people have received much if any training or coaching, how most people create presentations, graphs, and charts is based upon their own self-teaching.  Sometimes they’re good and sometimes they’re bad.  Oftentimes, people don’t know that their methods for data visualization are bad because they’ve seen so few examples of what well-designed visuals should look like.  So often, FP&A presentations take place in PowerPoint and Excel, not because they’re the best platforms, but because they’re the defaults.
 
Many visuals, like tables and graphs, can difficult and time-consuming to read.  They are often filled with information we don’t need and may even contain visual fluff that can be downright misleading. Some platforms allow for visuals to be enhanced with all sorts of bells and whistles which detract from the main message more than add to it.  Relying on misleading information can, of course, be damaging to organizations which causes them to make bad decisions, lose money, and miss opportunities.  Even worse, relying on misleading information can lead to catastrophic consequences.
 
When designing a data visualization, the first questions that should be asked are the most important:

  • What is the purpose of the data visualization?
  • What are the business questions we seek to answer?
  • Who is the data visualization for, what is their style for interpreting information, and what risks do they face in using information to make their decisions?

When we have answers to these questions, we should then ask how to best present the information.  Data visualization platforms can help.
 
On one side, technology offers all sorts of features that help us present information in a wide array.  Similarly, a lot of the technology is full of enhancements that makes it slightly more attractive than other platforms.  But on the flip-side, many people never learn how to properly present information in clear and easy-to-understand ways that help us make good business decisions.  Also, technology has in some ways made us complacent; we rely on the platform to present information how IT wants, rather than the opposite – we telling the platform how the data should be optimally visualized.
 
One of the best ways to assess the quality of a data visualization is by grading its effectiveness.  Stephen Few, one of the world’s leading experts in data visualization, suggests effective data visualization has seven criteria that fall into two general categories.[1] One category is informative and the other is emotive, that is, it produces an emotional response.  Within the informative category, data visualization should be useful, compete, perceptible, truthful, and intuitive.  Within the emotive category, data visualization should be aesthetic and engaging.  When a data visualization is graded highly on all seven criteria, it is reasonable to say objectives are being met.
 
When there’s so much visual information to review, audiences often don’t know what’s most important.  Without a keen ability for presenting and influencing, stand-alone data visualizations lack impact.  FP&A professionals should seek to manage information flow before, during, and after presentations as well as improve their credibility through public speaking skills.  
 
In the day or days leading up to a meeting or presentation, share a list of participants to be in attendance, an agenda with key discussion points, and timing for keeping the session on track.  In this ‘pre-work’ communique, provide background, details, and analysis that will be discussed.  This way, when attendees are in the presentation, most of them already have a good background of what will be discussed.  This saves a tremendous amount of time and distraction.
 
At the outset of the meeting or presentation, clearly state the objective of the session and goals of the individuals in attendance.  Ideally, the meeting or presentation will be linear and to-the-point, with the main take-aways to be decided and next steps to be taken.  Sessions shouldn’t be informational discussions; they should be action-oriented.  Data visualization should enhance the conversation and not distract from it.  At the end of the meeting or presentation, details, supporting analysis, and other important but not pertinent information should be provided as a supplement so as not to distract from the live conversation.
 
We’re entering an era in FP&A where we have an abundance of big data.  This information can provide deep insights into our business and world; however, it must be used intelligently.  We need not give into the defaults our business intelligence and analytics platforms provide simply out of complacency.  We can deliberately design beautiful, yet extremely practical, data visualizations to better stories and make quicker, smarter decisions.
 
[1] Few, Stephen. “Data Visualization Effectiveness Profile.” Perceptual Edge Visual Business Intelligence Newsletter.  January/February/March 2017.

 

The article was first published in Unit 4 Prevero Blog

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Demystifying Millennial FP&A Careers

By Carl Seidman, Principal, Seidman Global LLC

Summary

Understanding the role of an FP&A professional is difficult, since it may differ across companies, industries, and even within the finance function of the company itself.  What further complicates the profession in the disruptive and non-traditional work-styles of Millennial workers compared to their predecessors in the Baby Boomer and Gen X generations. The Millennial generation, which continues to make up a larger and larger percentage of the workforce, will change the way FP&A hiring takes place and the way we manage our finance talent.  The article will demystify Millennials and explain how the FP&A profession must change to attract top talent.

Body

By 2025, 75% of the workforce will be Millennials, the generational group born between 1980 and 2000. They’ve grown up during a time of swift change and technological innovation. They’ve also lived through a global economic recession and upheaval that has transformed the way people work and live. Accordingly, Millennials have a very different set of priorities and expectations that differ notably from other generational groups.
 
At the same time, the demands of businesses require unique talents from accounting and finance professionals. What young professionals can expect to see in their careers and what elders need to consider when developing this highly-motivated demographic, will be vastly different than decades past.
 
Supporting this assertion, the American Institute of Certified Public Accountants (AICPA) unveiled unprecedented changes to the CPA exam beginning in 2017. [1] These changes, intended to address the changing needs of the accounting profession, included: assessing higher-order cognitive skills, critical thinking, problem-solving and analytical ability, as well as professional skepticism; a thorough understanding of professional and ethical responsibilities; a strong understanding of the business environment and processes; and effective communication skills. Although this batch of skills has long been valued in the workplace, it wasn’t until recently that this combination of technical and soft-skills would be tested by the profession’s pre-eminent certification.

Many traditional accounting duties – such as inputting journal entries, closing month-end, and preparing financial statements – are not the value-add activities they once were. While they’re mere necessities keeping the wheels on the bus, they aren’t necessarily steering the bus in a valuable direction.  It’s not to say that companies will forego these core accounting activities altogether, but they will become increasingly automated or outsourced to low-cost providers. The changing dynamic of the workforce will require that accounting and finance professionals wear more hats and behave more with strategic intention. Their value will come from duties that require critical thinking, not just doing and repetitive tasks. They’ll be expected to play different roles within the function. More accountants will find themselves behaving more like FP&A professionals, financial strategists focused in strategic planning, analytics, and making decisions.  
 
Knowing this evolution, accountants should anticipate which skills they’ll need. Effective communication skills, which have long been present on job descriptions of all types, are going to become increasingly more important among financial and analytical professionals. Specialists in these areas are not only going to be expected to be technical experts, they will also be expected to translate analytical outcomes into easy-to-understand mediums for financial and non-financial people alike. Presentation skills, data visualization, and emotional intelligence will be some of the core soft-skills FP&A professionals will be expected to possess. Surprisingly, these skills, aren’t commonplace in university business curriculums or entry-level job training – but they should be.
 
Finally, Millennial workers, compared to prior generations, may demonstrate a greater hunger for development and reinvention throughout their careers. Their managers, who should take the time to mentor them, must also be greeted by young professionals who are coachable. Rather than expect career growth to occur concurrent with the passage of time, young professionals must demonstrate their mastery of technical and soft-skills alike. Millennials should seek out project opportunities that develop their critical thinking and problem-solving skills rather than anticipate those projects coming to them.  
 
The changes taking place within accounting and finance may not be news to those of us already in the profession because we see the impact in our work every day. But it may be surprising to those people now entering the profession. No longer does success come to those who masterfully memorize and apply technical methods. Success will come to those who can think strategically and subjectively, solve unique problems, and add value across many dimensions of the business. This is the new finance and it’s quite different than the one we recognized in the past.

[1] “Exposure Draft:  Maintaining the Relevance of the Uniform CPA Examination.”  AICPA; September 1, 2015.

The article was first published in Unit 4 Prevero Blog

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The Pedigree of a Successful FP&A Professional

By Carl Seidman, Principal, Seidman Global LLC

FP&A is quickly becoming one of the most important fields within corporate finance.  The ability to manage working capital, stimulate growth, collaborate across functional groups, steer toward opportunities and away from substantial risk all falls within the wheelhouse of the FP&A professional.  How does someone not currently in FP&A enter the field?  How does someone already in FP&A succeed in their role and ensure they're at the forefront of the function's evolution?  This article will explain.

Financial planning & analysis, or more commonly referred to as FP&A, is a business discipline focused on financial management and strategic alignment.  To put it more simply, if a CFO’s position were broken down into its many parts and those parts were translated into separate job descriptions, most of those jobs would be in FP&A.  
 
It may surprise many that modern finance, as we know it today, has been around for less than a century. Further, the ways in which companies manage their finances and planning have been exercised for less than a decade. Bring computing and big data in the equation, and today’s finance has been practiced for just a handful of years. Because of the rapid change taking place in corporate finance, the management of the function is evolving as quickly as ever. There has never been a more urgent need for financial planning & analysis and never a better time for career advancement in finance than there is now.
 
The pedigree of a successful FP&A professional may look different than that of a traditional accountant or financial analyst. While many of the building blocks of talent are the same, the application of that talent is wildly different.
 

  • Excellent accounting skills – Despite the evolution of the accounting function away from traditional and mechanical tasks toward strategic and analytical ones, the importance of accounting expertise should not be discounted. CPAs are likely to look more like FP&A professionals than traditional accountants. That being said, those working within FP&A will benefit tremendously from a fundamental understanding of accounting.
  • Critical-thinking ability – The foundation of double-entry accounting ascertains that there are right and wrong answers. The accounting profession is protected by this objective black and white. However, the ideal FP&A candidate must be comfortable with ambiguity and knowing that much of the field is layered with shades of gray. Often there are many good answers and it’s up to the FP&A professional to understand the assumptions, analyze the possible outcomes, and assess the risks attributed to each. This is a different way of thinking than what traditional accountants grow up with and it’s a critical characteristic of FP&A.
  • Effective communication – FP&A professionals must be able to take the complex and make it extraordinarily simple. This is where the function must truly set itself apart from all others and will find much of its value. Non-financial professionals may struggle to understand the quantitative assumptions behind a decision, while financial professionals may struggle to translate quantitative assumptions into easy-to-understand terms. The FP&A professionals who can effectively exercise both talents will be indispensable members of their teams. Effective communication comes in many different forms – an ability to clearly write, influentially speak, and cleanly display visuals to translate information.
  • Emotionally intelligent and conciliatory – FP&A is like the financial heartbeat of organizations.  Information flows to FP&A from other functional group while financial intelligence and decision support flows from FP&A to other functional groups. Being in this unique position, FP&A has the responsibility for understanding and relating to others across the entire organization in a way most other function do not.  As such, FP&A needs to possess emotional intelligence in the form of empathy, diplomacy, and tact to work effectively with professionals from every group.

 
At the beginning of an FP&A career, development of technical skills should take priority as a means of transforming the organization from the numbers. At the time, the value of interpersonal skills shouldn’t be discounted. As FP&A professionals’ careers evolve, they’ll be likely to discover a greater focus on leadership skills and influence and less importance on technical skills. It isn’t that technical skills are no longer relevant – quite the opposite. It’s that the role of an experienced FP&A manager or director is to analyze decisions, make decisions, and develop more junior staff. That said, interpersonal skills become even more important the more senior the FP&A professional becomes. In summary, there are few positions that require such a mix between technical and soft-skills and can have such a tremendous impact on the decision-making in an organization. FP&A is an exciting career choice and the future of the profession is extremely bright.

The article was first published in Unit 4 Prevero Blog

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The Future of Business Modeling – Excel to Integrated Planning to AI

By Carl Seidman, Principal, Seidman Global LLC

The pressure of globalization and agile decision-making requires companies to improve their business modeling. They must integrate big data in real-time, synthesize that data to identify causal relationships and value-drivers, and ultimately use the findings to make high-impact business decisions.  

While many companies seek to move away from Excel in financial planning and analysis, it still plays a major role for most global corporations.  But so do integrated planning platforms such as EPM and ERP. Further, corporations are just beginning to explore the benefits of automated decision-making and AI. This article will address the positives and negatives or traditional Excel software, integrated planning platforms, and what the future of FP&A looks like with artificial intelligence and automation.
 
Among all the changes taking place within FP&A today, digital transformation is one of the most significant.  Never in the history of business has information been so accessible, so quickly, as it is today.  Digital transformation isn’t just a movement from institutional finance to cloud-based finance – it’s how digital information is created, stored, managed, and acted upon.
 
The quick and easy access of digital information poses new opportunities and challenges.  On one hand, the utilization of certain business data and analytics was never possible until recent years. As such, businesses will be able to make critical decisions very quickly based upon large sets of information.  On the other hand, the expanse of information makes it even more challenging to integrate end-to-end financial planning.  Without clear systematic processes in place and the technology to facilitate those processes, the benefit of digital transformation may be lost.
 
A recent study by Deloitte shared that nearly 40% of surveyed organizations still use spreadsheet software, such as Excel, as the primary tool for forecasting and budgeting[1].  Another 24% rely mainly on spreadsheet software but use a vendor planning tool or ERP platforms to integrate activities.  Based upon these findings, over two-thirds of surveyed companies are likely to be constrained in planning and analysis and unable to perform dynamic forecasting.  Only one-quarter of respondents utilize rolling forecast, which is the modern dynamic forecasting tool ensuring future business cycles are always within view.  
 
Deloitte’s findings are not surprising.  Many large institutions utilize integrated platforms primarily for data collection, aggregation and reporting that feed spreadsheet software and are not optimally used for integrated planning.  More recently, however, businesses are depending on the usefulness of financial EPM (enterprise performance management) platforms to run all financial channels such as budgets, forecasts, and financial statement consolidation.  We can expect to see more utilization of integrated planning tools, working in-tandem with spreadsheet software for ad-hoc analysis.  
 
Excel is still the analysis gold-standard for many companies and is far more flexible than many integration platforms. Further, Excel exists on a majority of PCs and is familiar to many business professionals. Finally, most small and mid-sized businesses simply cannot afford more robust software packages that complex corporations so dependently rely upon.  All said, we can expect spreadsheet software such as Excel, to continue serving its niche as an ad-hoc analysis tool, but we’ll gradually see less reliance on it for integrated planning. Survey results imply that, even though many companies still rely heavily on spreadsheet software, their desire is to move beyond it.  
 
Technological advancement should invite the outsourcing of manually-intensive and routine transactional activities that don’t require high cognition.  Outsourcing in this manner means delegating the tasks to machines which can easily and cheaply complete them.  We can expect machine-learning and automated decision-making to become more common in traditional reporting and FP&A functions, freeing up human brainpower for more value-add activities.  Institutions with sufficient spending budgets will continue to trailblaze this new frontier in digital transformation.  As software vendors continue to tailor their offerings, middle-market companies and small business won’t be far behind.

 

Notes:

[1]  Deloitte LLP.  “Integrated Performance Management Plan. Budget. Forecast”  2014.

 

The article was first published in Unit 4 Prevero Blog

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Author's Articles

January 14, 2020

The purpose of financial planning and analysis is not to build perfect forecasts and financial solutions. The purpose is simply to make better business decisions. Numbers themselves can support decision-making but the story is what convinces people to make the right decision. This article will discuss best practices in data visualization that resonates with financial and non-financial people alike.
 

 
December 18, 2019
FP&A Tags:

The Millennial generation, which continues to make up a larger and larger percentage of the workforce, will change the way FP&A hiring takes place and the way we manage our finance talent.  The article will demystify Millennials and explain how the FP&A profession must change to attract top talent.

November 12, 2019

FP&A is quickly becoming one of the most important fields within corporate finance. How does someone not currently in FP&A enter the field?  How does someone already in FP&A succeed in their role and ensure they're at the forefront of the function's evolution? This article will explain.

 
May 30, 2019

The pressure of globalization and agile decision-making requires companies to improve their business modeling.  They must integrate big data in real-time, synthesize that data to identify causal relationships and value-drivers, and ultimately use the findings to make high-impact business decisions.

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