Part 5: Help your CFO with long range decision making using Oracle Cloud EPM!
By David Pabst, Solution Architect and Oracle Ace Pro
Welcome to the fifth installment in my series on Oracle Cloud EPM Planning’s prebuilt modules. So far, we’ve explored Financials, Workforce, Capital, and Projects—each providing tailored planning capabilities for key areas of your business.
Today, we turn to Strategic Modeling, Oracle’s scenario-based environment for long-range financial planning, forecasting, and what-if analysis. It’s the ideal tool for quickly and confidently answering leadership’s big-picture questions: "What happens if...?"
What Is Strategic Modeling?
Oracle Cloud EPM Strategic Modeling is a turnkey solution designed specifically for long-range strategic financial modeling. It bridges the gap between flexible but error-prone spreadsheet modeling and tightly controlled enterprise planning tools. Whether evaluating mergers and acquisitions, capital structure changes, or simply running multiple forecast scenarios, Strategic Modeling gives CFOs and FP&A teams sophisticated financial modeling capability—without lengthy or complicated projects.
It combines the structured environment of dedicated software with the ease, speed, and flexibility typically associated with Excel spreadsheets.
How does this help my CFO?
I like Strategic Modeling because it puts advanced capabilities directly into the hands of the CFO and their core finance team, enabling quick modeling of strategic questions, such as:
What if we invest in a new facility or product line?
How will our financials be impacted if we change our financing strategy (pay off debt, borrow, pay dividends, repurchase shares)?
What if our growth rate is faster or slower than expected—what would our financial position look like in five, six, or even seven years?
A traditional bottom-up planning process offers granular detail, enabling alignment across business units and operational activities (what to build, buy, sell, etc.). But strategic decision-making requires top-down clarity on where your organization should go. Strategic Modeling delivers that perspective quickly and independently, without needing widespread organizational involvement.
I often hear, "Why not just use a spreadsheet model?" You certainly can—but spreadsheets carry risks, including hidden logic errors that could lead to billion-dollar mistakes. Strategic Modeling mitigates these risks by providing robust built-in logic, controls, and auditability, while still allowing the flexibility you’d find in Excel.
Strategic Modeling provides the elegance of a spreadsheet within the governance of a tool. This model projects EPS out 5-years based on an underlying set of growth and M&A assumptions.
What Can You Do With Strategic Modeling?
Strategic Modeling excels at:
Flexible Long-Range Planning (3–10+ years): Quickly build integrated financial statements with embedded logic.
Rapid Scenario Modeling: Easily adjust assumptions and instantly see financial impacts, ideal for executive and board-level discussions.
Debt and Capital Structure Planning: Model complex financing scenarios, debt structures, and covenant compliance.
M&A and Strategic Investments: Analyze mergers, acquisitions, divestitures, and major strategic initiatives
Executive-Ready Reporting: Generate polished, financial statements and executive summaries.
Key Features
Turnkey Solution: Quick deployment without extensive IT involvement or complex implementations - time-to-value measured in weeks.
Spreadsheet Flexibility with Cloud Control: Intuitive spreadsheet-like modeling, enhanced by governance of a tool.
Built-In Financial Logic: Out-of-the-box calculations for depreciation, retained earnings, debt schedules, and more.
Scenario Comparison: Easily toggle between scenarios (Base, Best, Worst)
Connected Forecasting: Seamless integration with other Oracle EPM modules, aligning operational budgets and strategic planning.
I believe Strategic Modeling’s killer feature to be the "Scenario" modeling where you can include various elements, like an acquisition, and see the impacts on the combined entity.
I believe the killer feature of Strategic Modeling to be the "Scenario" modeling where you can include various elements, like an acquisition, and see the impacts on the combined entity.
Is Strategic Modeling Right for You?
This module is a great fit if:
Your CFO needs rapid access to scenario modeling capabilities in a few WEEKS.
Your finance team requires the flexibility of spreadsheets combined with structured enterprise controls.
Your organization frequently performs strategic scenario analysis or long-term forecasts.
Executives and the board demand quick, accurate answers to strategic financial questions.
Consider alternatives if your primary need is detailed operational budgeting (e.g., by cost center/account) without strategic scenario modeling, or if the primary audience extends well beyond the CFO's office.
How Does It Work?
Strategic Modeling streamlines strategic planning through a simple yet powerful process:
Select a Template: Deploy prebuilt models tailored to your industry or business needs.
Integrate Historical Data: Seed your model with actual financials for immediate accuracy.
Adjust Assumptions: Test drivers in real-time, seeing immediate results.
Conduct Scenario Analysis: Quickly compare multiple scenarios to inform strategic decisions.
Generate Reports: Instantly produce executive-level financial statements and summaries.
Strategic Modeling arrives with several pre-built, industry specific integrated P&L, Balance Sheet and Cash Flow models that serve as a jumpstart.
Conclusion
Oracle Cloud EPM Strategic Modeling empowers CFOs and finance teams to confidently navigate strategic decision-making. Its unique balance between spreadsheet flexibility and enterprise-grade control makes it perfectly suited for today’s dynamic business environments.
Stay tuned for the next installment, where we’ll dive into Predictive Cash Flow Forecasting, helping finance teams achieve greater clarity on liquidity and financial health.