Fredrick Straube 0:00:05.0:

First of all, so happy to be here. Super excited to talk a bit about how we at EQT, and mainly our FP&A team, leverage Anaplan, especially in the decision-making area. Yes, so my topic is driving high-performance decision-making at EQT [unclear words 0:00:23.6] using Anaplan. I just want to start to talk a bit about what is EQT and what we do. So, EQT is a private equity firm, and we like to view ourselves as a purpose-driven investment organization. We really like to work actively with the companies that we own in our funds, and our purpose is really to future-proof companies and make a positive impact for all. For all means, for the portfolio company itself. It means for our investors, of course. It means for the world, for the planet, but, of course, also for us and our shareholders. Our vision is to be the most reputable investor and owner of the portfolio companies. Private equity, it’s actually quite simple if you take a step back. We collect monies from our investors. We put this money into a fund in a certain strategy. We buy portfolio companies. We hold them. We actively manage them for a certain period of time, usually about six, seven years. We sell the company, hopefully at a profit, and we can return money to our investors.

Fredrick Straube 0:01:24.6:

A few stats about us, so today, we’re about 2000 employees. We’re a global organization, so we have offices all over the world. We have about 1300 clients. Also, again, come from all over the world. It is ranging from institutional investors to private individuals and large corporations. In our funds, we own about 300 portfolio companies, and in our real estate funds, we own more than 2000 buildings. So, quite a big firm, actually. I think the latest asset under management number, which is basically, how much money do we manage at the moment, is about $270 billion, so a lot of money, and I think it’s really exciting to be part of this. I think the next slide is quite telling about the EQT journey, and it looked like this. EQT is a Swedish-based firm. We were founded in 1994 here in Stockholm, and in the beginning, it was very much focused on the private capital business. It was focused in the Nordics. We raised our first fund in 1995, and then, you can see, we slowly expanded. We raised more money. The funds got bigger and bigger, and we started to expand to all of Europe. Then, in '08, we launched our infrastructure business, so going from a purely private capital business to also investing in infrastructure. Then, of course, something happened around ’18, ’19, and especially 2020, the [unclear word 0:02:57.9]. 

Fredrick Straube 0:02:58.4:

Since then, we’ve just seen a massive exponential growth. In 2021, we acquired an American real estate firm called Exeter, now named as EQT Real Estate. Then, in 2022, we acquired an Asian private capital firm, so we really expand our businesses through acquisitions, and these are just the two biggest ones. We made a bunch of others as well. As you can imagine, this creates quite a few challenges for an FP&A team. We need to manage more capital, more people, but also just different ways of doing things. When EQT was small, it was quite simple because we had control. It was Sweden-based. Yes, we had offices all over the world, but it was still mainly focused on Sweden, which meant that it was quite simple to do the budget and forecasting processes. Now, all of a sudden, we have new businesses doing things in a completely different way, having different compensation structure. We get funds that are completely different from what we’ve launched at EQT. The business just grows, and with the growth also comes increased complexity. I think when it comes to decision-making, from an FP&A perspective, the main tool that we have to use is the budget and forecast process, mainly the budget.

Fredrick Straube 0:04:17.3:

So, my talk now is going to be quite focused on the budget process and how we use that to control the business and, of course, make better decisions. Where are we coming from? This is about three years ago when I joined EQT. Previously, I worked at Deloitte. Super happy to see some old colleagues here today, and that’s really where my Anaplan journey started. I’ve been working with Anaplan in a few different ways for about seven years now, so I would say I know it quite well. It’s been anything from a hands-on model builder to being in a more digital transformation role within the FP&A team, as I am now. So, I’ve seen both sides, both the developer side, the consulting side, but also the end user side. When I joined EQT three years ago, our budgeting process was basically purely Excel-based. That works fine, but it also creates some challenges, and some of these challenges were the following. We were really struggling with - if we start at the top left - the data. Data is always an issue for most organizations, and hopefully, some of you guys recognize that. I think that we knew the data was available somewhere in the organization. You just needed to know who to talk to.

Fredrick Straube 0:05:39.9:

It was really hard to find a way to share it with everyone. We also had a bunch of Excel files as I mentioned. We are divided in a way that different people have responsibility for different business lines within the organization, and every business line had their own Excel files. Someone built this Excel file at some point. That person might have left or forgot why they did things a certain way. So, you had all of these legacy files, which are super important to make the business run, but no one really knows how it works. I see some people smiling, and I think that's good because that means we weren’t the only ones that were in this situation. We were also struggling with alignment in these files. How do you know the private capital Excel file, and the infrastructure Excel file are using the same logic? How do you know they're using the same assumptions? Well, you don't unless you really talk to each other, and things change. Someone hears something in the corridor. Someone updates one file. Don’t know if you updated the other file. So, there was just a lack of alignment between all of this. Of course, with Excel also comes collaboration challenges. Of course, you can collaborate in Excel. You can have SharePoint, you can have OneDrive, etc., but it's still not really a collaborative-friendly tool. It works, but it's definitely challenging.

Fredrick Straube 0:07:00.6:

Then, I think one of the main challenges for us at EQT and the FP&A team was the transparency challenges. We basically had a set-up where HR were responsible for the workforce planning, where the business line controllers sitting in the business, responsible for the forecast of the revenues from the fund, and FP&A got the output. That’s fine, but we couldn’t really answer any questions about details. We were just given the output, and we didn’t have the details to be able to do the analysis that we wanted to. Then, of course, when it comes to scenario planning, we had it, but, as you know, you take a copy of the Excel file, you change the assumptions, and then all of a sudden, you have two Excel files. How do you know your update workflow? It was also super-reactive, so it was more like when we got a question to do an analysis, we did it, but we weren't proactive at all. All of these are quite big challenges, and it meant that we felt that we really needed a change. So why did we need to change? First of all, as I mentioned, we have quite a few businesses, both in Asia, the US, and Europe. With that comes - as I mentioned again - new compensation structures, new bonus models, new acquisition bonuses for real estate business, and all of this stuff, which our existing workforce planning tool just couldn’t cater for.

Fredrick Straube 0:08:28.3:

So, we spent a lot of time looking for a tool that could fit us, and could fit the way we do our business, and the way we wanted to plan at EQT. We couldn’t really find one, and that was a massive challenge for us. Next, we had very siloed planning processes, as I mentioned. The workforce planning was done like this. The [?revenue 0:08:50.7] forecast was done like this. The overage forecast was done like this. No one really had the full picture. I mean, we had it in our consolidation system, but then you didn’t have the details, the underlying assumptions to why a certain number looked the way it did. I think it’s important to mention that EQT is a very decentralized and entrepreneurial organization, with basically the business lines doing their own things, which is super good for our growth and the company on its own, but it’s also very challenging for FP&A. We spent so much time just arguing about the baseline that we didn’t have time to discuss the actual forecast. We could go into meetings and say, ‘Oh, right, so your current headcount in your team is 15.’ ‘No, it’s not, it’s 12.’ Then, we spent ages just discussing that, why the numbers didn’t match, instead of actually discussing things that would add business value. Of course, as with any Excel files, there’s a massive risk of manual errors. You don’t have it systemized. Anyone can change a formula. Yes, of course, you can protect it, but does [sic] people really do that, and you also have very sensitive data just flying around?

Fredrick Straube 0:10:03.6:

In our case, compensation for individuals, but also exit forecasts for portfolio companies, and sometimes even listed portfolio companies. Obviously, super sensitive and should not disable someone’s local hardware. It should be systemized and only shared on a need-to-know basis. Then, as I mentioned, the scenario planning. It was very reactive, very manual, and leading to slower business decisions. Whenever we did a scenario analysis, it was always a matter of taking the time. It could take hours and hours before you actually had a result. If you take this to the extreme, it basically means that we were losing money because we’d spend so much time just crunching numbers, instead of actually analyzing it and doing what we do really good, which is running the business. We sat down, we had a chat in the FP&A team, together with tech, where I was at the time, and we thought, how can we rethink this process? How can we just start from scratch? An ideal audit process for EQT the way we are organized now, and how we think we’re going to be organized in future, what will that look like? So we made a strategic decision to just redo everything, start from scratch, and try to do it customized to how we want it.

Fredrick Straube 0:11:24.7:

Spoiler alert - hence why I’m here - we choose to do that in Anaplan. So why did we choose Anaplan out of all the planning systems available? I think one of the reasons was, actually, that we already had Anaplan in our company. At the time, I’d been with EQT for about six months or so. I’d been working with Anaplan. We had a few smaller use cases. We were running some small, almost like proof of concepts. We had some tailored models that were specific to funds, etc., but we never really scaled it and really leveraged the full potential of Anaplan. So, we already had it, and it was just easy to get up and running, do a proof of concept quite quickly to see if this is something that would suit us. Next up, as anyone using Anaplan knows, you had a really powerful calculation engine. It’s super quick, and we heard earlier this morning about having, I don’t know how many billions, trillions of cells, and it just takes a few seconds. The calculation engine is way more than we need, which is always nice. You can also really cater for some advanced scenario modeling, quite simply, actually, if you do it right from the beginning. Then, of course, it allows for collaboration in a few different ways.

Fredrick Straube 0:12:41.1:

I think one of the main reasons why Anaplan is super collaborative is, yes, of course, you can comment, and you can share stuff, etc., but you know you’re looking at the same data. If I’m talking to someone, and I talk about a certain cost center or legal entity or whatever, as long as they are in Anaplan, we are looking at the same data. I don’t even have to share it in Slack or email. They just have to log on, and we can collaborate in real time which is, at least for me, that’s a massive win. I think the biggest one of all is the one to the bottom left. I think Anaplan allows for analysis from a holistic perspective with aggregated data from multiple sources, not just financial data. Any data related to role as the CFO, or in our case, the FP&A function. I think this is just amazing. You can basically pull any data that you want, automatically, of course, into Anaplan. You can add it as part of your planning process. You can really get to integrate the timing part, where it’s not just I’m looking at my costs, or I’m looking at my revenues, it's the full spectrum of any data relevant to our planning process.

Fredrick Straube 0:13:50.2:

I think another gain to this is also that Anaplan is quite similar to Excel in many ways. It’s very familiar for the end user interacting with Anaplan, which, at least in our case, made adoption much easier, especially if you talk about a function like HR, that are not necessarily used to working in super advanced tech systems in the way that we in FP&A are. I think Anaplan really sits in the sweet spot in-between being a distance system like Excel and being a tech system, where it's more like, you know, you enter a number, there’s a tumble dryer doing its thing, and then you get an output. In Anaplan, you can follow the numbers. You can drill down. You can see the formulas, and anyone who’s used to working in Excel can kind of follow what’s happening, which I think is a massive gain. Then, of course, Anaplan is scalable. It can handle loads of data. It can grow with the business, especially if you integrate it with your infrastructure, basically. What does that mean? You have your list of cost centers. You have your list of legal entities. I don’t know, portfolio companies, funds, whatever. As long as the source systems are up to date, you know that the data you’re looking at in Anaplan is always up to date.

Fredrick Straube 0:15:04.4:

Yes, of course, you can do this in Excel as well, but here, it's really systemized, and it's controlled. You can set alerts for updates, etc., so you can really be comfortable that the data you’re looking at is the latest and greatest. So what did we actually do? As I said, we took a step back, and we started with the foundation. We started with a process, the data, and the responsibilities. I think one of the main strengths about Anaplan is really that you can fit a system around the process. You don’t need to take a process and shoehorn it into a system. You can really customize it to what your process looks like, but to be able to do that, of course, you need to know what you want your process to look like. So that’s where we started. We started with redesigning the entire budgeting process, and just thinking about how would we want to do it in an ideal world? Then, of course, everyone’s favorite topic, data. Excuse my French, but crap in, crap out. It's always going to be like that. Unless you have good data going into your planning models, the outcome is never going to be good. Then, of course, responsibilities, very closely tied to the process. Who’s going to do what? What do you want that to look like? What kind of access levels do you have? Just the general set-up. Laying the foundation before moving on to actually starting building models.

Fredrick Straube 0:16:35.6:

Being a private equity firm, about 70 per cent of our costs are related to workforce. So what we did, especially, as I mentioned, the challenges we had related to the workforce, we started off with building a workforce planning model. We basically just thought about how can we automate as much as possible and how can we just make sure that the existing business, but also potential future businesses, will be easy to adopt and just add into the model so we can have one workforce planning model, where we can feel comfortable with the forecast, and the budget is doing what we expect it to? I’m super proud to say that we now have a completely custom workforce planning model, which is working really well for us. We have so much more detail. It’s a funny story because we, actually, again, as I said, took a step back and started to think about the process. We realized that for FP&A to be able to be the best possible business partner, we need the full details. We need to be able to really calculate on an individual level, what happens if this person moves from this cost center to this one? What happens if this person moves from Stockholm to New York? What happens if we close this office, move all of these people to this office instead, etc.?

Fredrick Straube 0:18:02.5:

Now, we can do that. We can answer questions we just couldn’t before, which just meant that we are just a much better business partner, which means that we have a much higher level of trust from our stakeholders. It just means for a better experience for everyone in general. Next up was an OPEX planning model. Quite simple, but what we did here is that we just thought, okay, so we want the full P&L in Anaplan. That’s the end goal. The OPEX is, of course, important, but not as important as the [unclear word 0:18:37.2] plan. So what we did was that we created quite a simple model in Anaplan. We connected it to Power BI. We connected that to our ERP system, and now I can do cost tracking in Power BI, fully automated. So quite a small project, but still a massive win for us. Then, we move on to something that is very close to my heart because it’s one of the projects I’ve been spending a lot of time on quite recently, which is a fund performance/revenue forecasting model. I think for those of you not super familiar with the private equity industry, there’s something called carried interest, which is basically, how much of the profit in a fund does EQT earn? That is quite a complex calculation to get to that. It’s not just as simple as we get X per cent. So what we did is we took a step back again. You see the theme that there’s a lot of thinking involved before you actually start building the models.

Fredrick Straube 0:19:29.7:

What we did was that we thought, how can we give the business line controllers - so the people actually working actively with managing the funds and the portfolio companies - a tool they can use every day to run what-if scenarios, while leveraging the same calculation engine, and have an automated budgeting tool for FP&A. That is basically what we wanted to do, and then we started designing, we started building, and today, we have a model that can do exactly that. So super powerful, and we actually had a live demo of this for our top management, CEO, CFO, etc., just a few months ago, where we, live in the meeting, just pulled up Anaplan, created a new scenario, pushed a deal, six months later, decreased the [?mark 0:20:17.6] of another deal, increased it up another one - just a hypothetical scenario - clicked the button, and then we just showed the results in a matter of one minute. We basically got standing ovations. It was something super unique they hadn't seen before, and it's something that saves us massive amounts of time, all from a business line control perspective, but also from an FP&A perspective. Then, of course, we integrated this with our source data. So we feed that data automatically. We know the data is always up to date in the model, but we also integrate it with our financial consolidation system to just eliminate any chance of any manual errors.

Fredrick Straube 0:20:58.8:

I think the next one is actually worth talking about for a few seconds as well because, Anaplan, yes, it’s quite similar to Excel, but it’s not Excel. I think that’s fair to say. It’s different, and there is a certain competency needed, both from a developer’s perspective and our own tech competence, but also from the end-user perspective. If you have an FP&A team of about ten people, as we are, it's really important that everyone knows the model, everyone feels comfortable with the model. Everyone knows what's happening, so we can look at the outputs and feel comfortable that this is exactly what we want it to be. We had a general upskilling of the FP&A team, loads of training sessions, both with tech, but also with the HR people who is going to be in the workforce planning model. The business line controllers who are in the front performance model, but also just general cost center owners who’s going to have to do their budgeting in the OPEX model. Then, of course, we have the tech perspective, where we needed to find, who’s actually going to build in Anaplan? Believe me, we’ve tried all different setups. We’ve had a bunch of employees. We’ve had on-site consultants. We’ve had off-site consultants. We have had project teams from different companies come in helping us. We just did trial and error. What is the best fit for us?

Fredrick Straube 0:22:18.5:

Today, we have a set-up where we have a combination of employees, which are super competent and really good, and knows everything about all our models. Then, we have off-site consultants which are just adding that really niche competence. So now, I think we have a super strong set-up and can really deliver models in a fast pace. Talking about how Anaplan actually did transform decision-making at EQT, in this case, mainly through the budget process, but I think as I’ve said many times, it really helped us become a so-much-better business partner to our stakeholders, with the main point being that we can answer questions we just couldn’t before. Detailed question about what happens if this deal doesn’t close the way we thought it would. What happens if we hire these five people in this office instead of this one? It’s just super easy to create a new scenario, run the analysis, and then we have the output in literally seconds. It's just super simple, and it's made everyone's life so much easier. Again, we can be confident that the same forecasting logic, the same assumptions, are used throughout the business. There’s no risk of having different models, and oh, did we update the salary increase assumptions in all Excel files? No, it’s all in one system, and if you don’t know what the assumption is, go in and check it. It’s visible for everyone. Of course, that means we can trust the data in a way we just couldn’t before, and again, data in is super important, but now we can really trust, and FP&A can own the data going out of the model in a way we just didn’t feel comfortable doing before.

Fredrick Straube 0:24:02.1:

We have faster budgeting processes. It’s less stressful, and we actually have higher quality with more details where required, and in some cases, actually less details. It’s really 100 per cent tailored to how we want to do it and what fits our business. We can now do what-if scenarios related to core business decisions much faster, less effort, and of higher quality, again, because the logic is validated. It’s systemized. It’s not an Excel file. It’s really been signed off by someone who knows it should be that way. So super powerful, and I guess if you want to take that to the extreme, it means we can make more money for our investors and for ourselves. Of course, all of this also massively increased the collaboration. We now have a much better relationship with HR, who are the ones doing the operational and workforce planning, even though we own the forecast. Our business line controllers, we can work together with them and look at the outputs of the fund performance forecasting model. Also, just in general, whenever we present material to a stakeholder, it’s just so much quicker. It’s higher quality. If they ask us to change a number, we can do it in seconds.

Fredrick Straube 0:25:23.8:

So starting to wrap up now, talking a bit about what was the output of all of this. If you talk about the fund performance forecasting, I was talking to one of the main business line controllers the other day. I just asked, ‘Hey, I’m doing this presentation. Do you have some numbers I can show?’ He literally said that, 'A scenario analysis that previously took four hours now takes five minutes.’ I asked him, ‘Is that really the case, and he was like, ‘Yes,’ because before, you had to go in and find the analysis you actually want to do. Then you needed to find an Excel file as he’s doing this calculation, if there is one. If there isn’t, take that times two. Then, you needed to create a copy of that. You needed to enter new assumptions, which you, hopefully, got from someone. Then, you needed to take the output, put it into a new Excel file [unclear words 0:26:10.9] the baseline, which is hopefully up to date with the latest exit forecast. Then, you need to do the analysis, take it into a separate PowerPoint and create slides. What we do now is just one button. Add a new scenario. Change the assumption. Done. The baseline is always up to date. The calculations are always correct, and you have the output in predefined formats and slides.

Fredrick Straube 0:26:33.8:

Workforce planning went from two people doing the entire workforce planning for all of EQT, about 2000 employees. I think we were closer to 1900 at this point in time, and now we have more than 70 people working simultaneously in our workforce planning model sharing the effort. Everyone is doing what they should be doing. Not more, not less. FP&A can still own the process, we can own the data, and we can own the output. Then finally, we have one single source of truth for the entire budgeting process. This is a massive gig. Just knowing where all the values are coming from, but also having, as I said before, less effort, higher quality, and more details where relevant. It’s really a win-win, win-win, I guess. Then just my last slide. I just want to say a few words about what we are doing outside of the FP&A scope. Obviously, FP&A is the main owner of Anaplan and the main user, but we also have a bunch of other models, smaller. I think if you look at our budgeting landscape, it’s about five or six models, but then we have probably, I don’t know, ten beyond that that are tailored to specific use cases. We do some deal financing calculations, where we calculate which financial vehicles to use whenever we buy a company or bridge loans, etc.

Fredrick Straube 0:28:00.1:

We do workplace ESG, where we both collect actual ESG numbers and then we can convert them to… Sorry, actual consumption numbers in terms of energy, electricity, water, waste, etc., to convert that into CO2 equivalent, to see what our carbon footprint from our offices are. We have a tailored real estate business. Real estate is just a beast of its own, so let’s just leave that for now. Global firm, tax calculations, super important to make sure we can be compliant with everything. Operational finance. Our fund operations team have a bunch of small Anaplan models, anything from reporting financials to validating metrics. Then we also have some fund-specific models, a model that is tailored to a specific fund, a fund that might have come with an acquisition, a fund that might be something we want to try out to see if we want to do it in our new standard. Then, we have some, I think, three or four specialized fund models that are tailored to one use case. I think that’s everything I had today. Thank you so much. Happy to take any questions if there are any.