Modern planning: In. Legacy planning: Out. Change or be left behind.
It is past time for leaders to adopt new and groundbreaking financial planning technologies to move to the leading edge of their market. Here’s how.
Leaders make decisions impacting the performance and the future of their businesses daily. These are often big moves with both risks and rewards, and each decision requires careful examination, analysis, and collaboration. Additionally, there is pressure to make these decisions more rapidly than ever before, given an increasingly fast-paced world. From shorter consumer attention spans and waning loyalty, to inflationary concerns and supply chain insecurity, these critical business decisions are not easy to make.
Many leaders make these decisions almost blindly. How so? Well, their decisions are formed with outdated or partial data, with limited partnership and collaboration from cross-functional business partners, and without the time and tools necessary to properly analyze those risks and rewards. There is little to no visibility across the business’s value chain to find weaknesses. Today’s fast-moving world leaves us no time to collect, organize, and validate data, and then draw insights from it to determine the next best action.
Data must be readily available at organizational leaders’ fingertips. The ability to connect parts of an organization is critical to making important decisions that could impact your competitive advantage. Leaders without access to real-time data put their organization at risk of lost revenue, lower margins, and loss of market share. With the right data for the right stakeholders, visibility into the impact and outcomes of each decision is clearer. Additionally, when all partners have accurate data from across each department, alignment on objectives for each team becomes more accurate and in line with what the overall organization is trying to accomplish. The ability to analyze data in real-time enables leaders to adjust operations with greater confidence, accuracy, and speed for even better business results.
Waiting doesn’t work. Unless you want to be left behind, advanced and intelligent planning needs to happen now, not years from now. It’s time for finance leaders to act and take their organization forward.
The legacy planning process is inadequate
Legacy processes and technologies worked as designed and gave us great advances in automation at one point in time. However, they don’t meet the needs of today’s modern finance leaders. Leaders need more adaptability and less manual and offline intervention. No one has time to compile spreadsheets, do manual data manipulation, and attempt to generate scenarios only to have them be outdated the moment they’re finished. Those using legacy software understand the frustrations of rigid systems, the reliance on technical skills for updates and modifications, and the need for flexible and one-off planning capabilities.
Technology has evolved to enable your modernization efforts and offer you a competitive advantage. Although many finance leaders are making do with older technology, it is critical to make the time and effort to advocate for its priority and to budget allocation. Here’s why.
- Finance most often has line-of-sight to data across the organization. Finance was historically in the position of collecting information across the business. But today, the modern finance leader needs to collaborate and partner with their counterparts across the entire organization. Holding the data isn’t enough. More time should be spent on analyzing detailed data, understanding key business drivers, and conducting meaningful discussions so that informed decisions can be made to achieve strategic targets.
- Legacy processes and technologies haven’t stood the test of time. “Because we’ve always done it this way” is a common, but detrimental, mentality for a business trying to stay competitive. Without adopting new technology and processes, the business isn’t prepared to meet the future. Leaders must ask the why, what, who, how questions to build a future-ready business. Asking why something is done a certain way allows leaders to uncover pain points and bottlenecks, and present opportunities to discuss cross-functionally which steps to take to improve.
- Surmounting pressures to explain operational plans and their ties to organizational strategy sits with finance leaders. More than ever before, finance leaders are being asked by the leadership teams, analysts, and other stakeholders, both inside and outside the business, to explain how potential gaps and risks will be addressed, how they’ll capitalize on opportunities, how they’ll address talent needs and skills shortages, and more. Finance leaders are now required to be storytellers for the business strategy and need to provide plans for successfully delivering results.
Modern planning is critical
Confident decisions are made when modeling supports the input from the corners of the business where the information resides. This level of collaboration unlocks a degree of insight, accuracy, and possible alerts that was previously unattainable. Modern planning tools can now provide calculations and results in real-time. This permits joint evaluation and analysis of information that results in shared decision-making about what is best for the business, identifying where there are potential risks or weaknesses (and how to mitigate them), and improve accountability and ownership of outcomes and results.
Having almost instantaneous information and analysis augments the finance function into a value-centric entity and a true partner to all other functions. Finance needs to move in lockstep with sales, supply chain, IT, procurement, and human resources to remain a strategic counterpart, rather than learning of operational decisions after they go live. This only works when real-time data access is assumed, decision silos are completely broken down within the organization, and best outcome scenarios are revealed with transparency from operational deployment to financial impact.
Many of your competitors have begun or are already well along on their planning transformation journey. Those who were quick to adopt big box technologies early on in their lifecycle 10 – 20 years ago are executive leaders at market-leading organizations today. Finance leaders have a similar opportunity. Those who embrace the modern technology stack and leverage it appropriately will accelerate their organizations to the forefront of their industries.
Finance must rise to the challenge of leading the charge with this modernization effort, given its access to information across the business. Finance also holds the responsibility to look at possibilities from multiple angles with a holistic view of performance and outcomes, and it has to report to multiple stakeholders, including company leadership, external stakeholders, board of directors, and more. Therefore, finance is the guiding light to better planning.
Where to start the journey
Whether already on the path or just starting to think about evolving financial planning, there are a few key things to consider to keep the planning evolution in motion.
- Take baby steps or bite-size approaches. Finding areas that can pivot and adapt as the journey continues is key. If facing challenges in getting organizational buy-in for full system replacement, leaders can tackle high impact, value-proving processes like revenue planning, price modeling, liquidity planning, and more. By starting with a process that can be incorporated into current architecture, leaders can begin down the path of a digital stack to prove the value they create and to strategically partner with IT to drive transformation.
- Recognize the needs of the business. Where are the immediate pain points and what is the impact to the value chain? Where are the burning platforms that need to be addressed immediately? What questions are leadership asking that the business is struggling to answer? Understanding these vital business needs will make the case for transformation more convincing and compelling to your functional counterparts.
- Connect the dots. After the immediate pains are addressed, start determining what happens before and after that process so linkages and connectivity can be created. Consider how these functions partner for optimal strategies and successful execution. Finance leaders should also look for avenues to drive value for their functional counterparts via shared elimination or reduction of “pain causing” processes. This partnership will not only build finance’s reputation as a strategic partner but will also bolster the priority of initiatives to create true transformation.
- Evaluate the entire value chain. Gone are the days of siloed plans. The entire organization needs to be aligned in meeting strategic targets. Fostering a mindset of collaboration, visibility, and shared accountability allows for connecting processes, plans, and people for optimal outcomes and builds a foundation for future readiness and success.
Modernizing the financing planning process is a must. Without an advanced planning software like Anaplan, finance leaders are putting their organizations at risk of losing out to top players and challengers in their industry. Now is the time to implement cutting-edge planning technology to ensure that your organization will survive and be competitive in an increasingly fast-paced, turbulent world.