21. April 2021
The global pandemic has served as a kind of wake-up call when it comes to planning for what’s next. Finance groups that had put off making necessary changes to their planning systems and processes—or felt satisfied with a business-as-usual approach to budgeting and forecasting—quickly discovered that their status quo had turned into a status no.
But after navigating complexity and uncertainty in the age of COVID-19, a sense of optimism appears to be emerging. Many CFOs see a future filled with opportunity, and they plan to harness technology to take advantage of it. That’s where adopting a modern planning model comes in.
Historically, businesses have relied on traditional planning models. These models often use familiar but outdated systems, annual planning cycles, and spreadsheets resulting in siloed data and decision-making, slow-moving processes, and stakeholders with visibility only into fragments of the bigger picture. Often called static planning, this way of budgeting, forecasting, and financial modeling can be laborious, time consuming, and inaccurate. It leaves budgets and forecasts “dead on arrival”—calcified with outdated information and unable to incorporate new realities without a heavy lift. And worst of all, it tethers the role of finance to the day-to-day minutia of managing spreadsheet versions and chasing down the latest numbers instead of lifting up finance to the strategic business leader it can be.
So, what’s the fix? It’s called active planning, and it’s essentially the photographic negative of static planning. An active planning model incorporates real-time data from every business-critical source within the enterprise stack and beyond, promotes cross-departmental collaboration, and allows for a panoramic, comprehensive view of the company, including financial and operational data. With capabilities like automated data integration and faster financial modeling, active planning frees up time for higher-value activities like analyzing trends, identifying key drivers, mapping correlations, gathering insights, and making data-driven recommendations.
Building this blueprint for agility would be extraordinarily difficult if you were to rely solely on spreadsheets or outdated systems. But many finance leaders plan to make technology investments that will help them achieve more agility in the future.
As you begin to evaluate your options, it’s a good practice to focus on getting everyone in the selection process aligned and engaged. Before you start your planning platform search, outline your key must-haves and those of stakeholders. Identify the capabilities you need now, but also consider what you will need in the future, because your needs will absolutely change as your business evolves.
You don’t necessarily need to completely abandon spreadsheets or overhaul your entire tech stack to get everyone working together (and doing so may make more enemies than friends). But you do need a centralized planning platform where everyone can collaborate easily, with real-time data integration from multiple sources. That integration will provide a single source of truth (rather than dozens of Excel spreadsheets creating endless version control headaches). And it’s critical for automation—a foundational element of active planning.
One useful resource is our Financial Planning Solutions: A Buyer’s Guide, which walks through this process. But in addition to that, be sure to review this checklist of seven characteristics you should insist upon from any modern FP&A tool:
Scalable. As you grow—and just as importantly, as technology evolves—you need scalable software to meet future demands and capabilities. Consider the future of artificial intelligence, machine learning, predictive algorithms, and dynamic financial modeling and look for a provider that is already investing in these innovations.
Powerful. The volume, variety, and velocity of data will continue to accelerate. According to Seed Scientific, by 2025, the amount of data generated each day is expected to reach 463 exabytes globally. Ensure your FP&A solution is built on a cloud architecture capable of ingesting and analyzing exceedingly larger and larger amounts of data.
Easy to use. This is such a simple and obvious need, but a rare reality. Neither finance nor its partners in the business needs another tool to master and struggle with. Your ideal scenario is an intuitive FP&A solution free of bottlenecks, troubleshooting, and guarded access.
Easy to manage. Look for simple deployment and low, IT-free maintenance.
Affordable. Aim for a planning tool that won’t break the bank. This is important not just for this year’s budget, but as adoption of your active planning model grows, you can invite new users easily without worrying that added seats will decimate your budget.
Configurable. Every business and tech environment has different needs—including yours. Find a solution that can be configured so you can plan in the same way you run your business.
Secure. As attackers become more and more sophisticated, you need to trust that your data is safe. Look for Service Organization Controls (SOC) 1 Type II reports, SOC 2 Type II compliance, SOC 3 attestations, ISO 27001 certification, and other trust and privacy certifications.
With an integration framework capable of ingesting data from multiple sources—and with democratized access to that data—you’ll be in a position to harness modern planning technology that positions you for agility and resiliency.
By selecting the right FP&A platform, you can establish a centralized hub for all the business-critical data and reporting you need and make operational leaders and stakeholders part of a culture of collaborative planning. Start the conversation now. Ask your stakeholders what their ideal FP&A platform of the future would include.
On the road to recovery, you gain valuable insight that helps you establish business goals for the future. Most finance leaders plan to take advantage of this unique moment to do what’s necessary to achieve business agility. Perhaps for them, the next wake-up call won’t be nearly as alarming.
This blog was originally published on the Workday Adaptive Planning Blog.
At Sereviso, we support businesses in their digital transformation journey and help them adopt suitable financial planning solutions for them, with full visibility over business data, high accessibility, and granular analytics. If you’re looking for a similar solution, check our website or get in touch with Sereviso experts