Industry experts Robert Kugel, SVP & Research Director of Business Research at Ventana Research and Mitch Max, partner at BetterVu, joined Anaplan’s Director of Product Marketing, Finance, Irina Lewis, for a webinar discussing how to build accurate forecasts with lifecycle forecasting. The hour-long webinar was rich in insights and research, covering topics such as business planning, budgeting, and enterprise planning applications.
The vision of business planning
Kugel began the webinar by providing an overview of the vision of business planning. He noted that having an integrated business plan could improve both business performance and management effectiveness. For companies to improve their competitiveness, they need to address their shortcomings and incorporate these four main characteristics into their business planning:
- Establish a baseline against which results can be measured. Performance needs to be measured against both business and financial objectives, not just the budget.
- Support managers’ decisions by quickly and effectively assessing contingencies and trade-offs.
- Enable individual business planning groups to work in one central, unified system.
- Ensure efficient use of participant’s time.
The reality of today’s planning
The purpose of planning is to figure out how to succeed in achieving business objectives. It should be an open-ended exercise that explores different paths to success. By contrast, budgeting is designed to prevent a company from failing by setting limits and insuring that those limits are enforced. Next-generation business planning is designed to integrate business operational plans with financial planning. Ventana’s planning benchmark research identified patterns that point to a common set of issues that many companies need to address. These issues include managing the budgeting process, the amount of time it takes before reviews occur, lack of coordination in adapting to change, and an overreliance on spreadsheets to manage the process and report the results.
Stuck in spreadsheets
Spreadsheets are still by far the most common tool that companies use to handle their planning process. Although their ease of use has made spreadsheets a habit, Kugel warns that it is increasingly becoming a bad one. Spreadsheets lack dimensionality, which means more time is required to plan across product lines, business units, sales territories, and currency. Dedicated planning applications, on the other hand, can give organizations greater flexibility, visibility, and accurate results.
Dedicated planning applications
A dedicated, integrated planning application allows each part of the company to produce and update plans collaboratively and on-the-fly. It also gives senior leaders an instant real-time view of the business strategy and plans, making forecasting and re-forecasting a snap. Having an integrated business planning model enables dispersed departments and business units to dynamically and collaboratively plan with a unified business strategy in mind.
Looking for more information on financial planning? Download our white paper, 5 things to look for in an enterprise planning and budgeting system, and explore other ways that companies are improving their planning and budgeting processes.