Planning, Budgeting and Forecasting Dinosnores

Every now and then you hear a story about a local organisation that leaves you thinking “I never knew they did that!”  That was the case for me and a hundred of my closest friends at the IBM Finance Forum recently, where Paul Ryan, the Chief Financial Officer of the Australian Museum, gave us insight into their business, their mission, and how they tackle the difficult challenge of planning, budgeting and forecasting for the age of dinosaurs and beyond.

The first myth Paul debunked, was that the Australian Museum is just a building you can take your kids to to learn about history.  The mission of the Australian Museum is to be at the forefront of scientific research, collection and education, with the aim of procuring rare and curious specimens of natural history, and to inspire young people to take up science.  With over 222 full time employees, 540 volunteers and a $772 Million business – it requires a little more than just selling a ticket at the door to keep it operating.

Fun fact:  Did you know the Australian Museum has over 18 Million cultural and scientific objects, but just less than 1% on show at any point in time?

You might think running a Museum is a simple business – not so.  The two major parts of the business – Exhibitions and Science – are supported by an extensive set of business operations – from events, collections, heritage buildings, commercial venues and sponsorships, treasury and machinery of Government, grants, projects, and media delivered to the public via digital channels.  Each requiring meticulous planning and budgeting to ensure smooth operations.

One of the critical functions of the Australian Museum is to attract and successfully display exhibitions – it’s the lifeblood of their business, both bringing in revenue and maintaining relevance over their 188 years in operation.  In addition to permanent and traveling gallery exhibitions owned by the Museum, they compete on an international stage to attract temporary exhibits such as the Aztecs and the Wildlife Photographer of the Year, with planning for each starting five years in advance.  One of the key measurements of success by the Government is social relevance and ticket sales – so attracting the right exhibitions and maximising attendance is critical to their success and the success of attracting future exhibits.

The Australian Museum also has an international reputation for scientific research, cataloging and describing over 100 new species in the last twelve months alone.  Projects include habitat, impacts and migration studies on the pesky Indian Myna and Noise Miner, and how leaving corridors of trees (such as down the middle of a main road) is driving out local birds and supports the growth of the pest.  They provide scientific support to Australian and International authorities on the body parts trade of endangered species such as shark fin, rhino horns and ivory.  They investigate aircraft bird strike, identifying bird species so they can study them and mitigate the risk of it happening again.  They even operate a world-leading research station on Lizard Island with on-reef facilities for coral reef research and education – working tirelessly to find ways to save the future of the Great Barrier Reef.

With such an important focus on research, you can imagine how frustrating it would be to expect scientists to spend valuable time inputing timesheets or capturing data – that’s time away from research and doing what they do best.

When Paul joined the Museum in 2014, on the last day of the financial year (!!!), he was faced with a number of challenges:

  • Management reporting was all done in spreadsheets, with data downloaded from SAP and massaged into line items.  There was no integrity in the numbers.
  • There was virtually no forecasting at all – it was all focused on where the money was spent.  Data often updated at the last minute – overnight the Museum went from a $1 Million surplus to a $40,000 deficit due to prepayments put into the system on June 30.
  • There was no visibility into whether people were working on completing their budgets, which meant it would often be left to the last minute when reminders were communicated.
  • Some people across the business were finding it difficult to use SAP, and needed a quicker and easier way to plan their budgets so they could focus on their jobs, not data entry.

Paul remembers his first board meeting well because the numbers didn’t add up!  People had forgotten to add activity from a new account in SAP into the spreadsheet – a mistake common in manually-created reports.

At the end of March 2015, the Australian Museum went live with IBM Cognos TM1 to streamline their financial planning, budgeting and forecasting process.  With a more user-friendly, Enterprise planning platform, Paul was able to move to a bottom-up budgeting process, giving ownership to the 27 profit/cost centre managers and 20 grant/project managers instead of finance controlling the spreadsheets.  So far the feedback from the business has been overwhelmingly positive, with people loving the new system due to its ease of use – they are now updating their forecasts directly into TM1 on a monthly basis.

With the introduction of TM1, the Australian Museum now has historical data available and reconciled, labour models created and integrated, assumptions behind the budget documented in detail, and a greater level of integrity in the numbers.  TM1 gave the finance team more visibility into which cost centre managers had started preparing their budgets, and which needed a gentle nudge to get started.  The team also has instant access to management reporting and the ability to drill down to investigate numbers – which means users can find answers themselves instead of kicking of email threads to validate and diagnose.

This year was the first time anyone had finished a budget before June 30 in the history of the museum. In fact, the first TM1 budget was completed before the end of May – less than two months after go live!

Moving forward, Paul discussed the Australian Museum is now looking at ways to incorporate SPSS predictive analytics for greater insight into admission analysis and better accuracy of forecasting models.

On a personal note, I’m always looking for new and exciting places to take my kids in the school holidays – I’m officially adding the Dinosnores sleepover program to our bucket list!  And while the kids lie there in their sleeping bags thinking about the Zebras, Giraffes and Bears around them, I’ll be appreciating all the work that’s gone on behind the scenes to plan and prepare an opportunity to bring out the imagination of my budding little scientists.