For the past few months, we’ve been closely monitoring the planning landscape and coming to some realizations. One of them is this: despite the time and resources that go into the planning process, financial plans and budgets — now more than ever — remain at risk of being outdated before they make it out the door.
The uncertainty over this period is evidence of this. It has shown us, in a stark and horrifying way, just how fragile our plans and expectations for our businesses and our lives truly are. These months also have shown us how interconnected and uncertain the world is. How the things we control are far outweighed by the things we don’t.
Before the pandemic, we were already in a state of continuous change. Businesses today have so many different variables, and deviations from our plans that require re-forecasting or course-correcting decisions have been completely normal up until now, if not wholly expected.
Yet where we could try to predict the future with some degree of confidence just a few months ago, we now face a world of incredible uncertainty. As we try to come up with answers to all of the questions we have about the future, we’re destined to get a lot of them wrong.
Questions such as: When will the economy be fully up and running? When will business confidence and investments start to rise? What does our future supply chain look like? How will we withstand the next inevitable pandemic?
The solution to this conundrum isn’t simply hoping you get some of these answers right. The solution is to become truly agile as an organization — to become a Continuous Planning company.
So, what does Continuous Planning mean for finance?
By 2024, Gartner predicts that 70% of new financial planning and analysis projects will become extended planning and analysis (xP&A) projects, extending their scope beyond the finance domain into other areas of enterprise planning and analysis. According to John Van Decker and Bob Anderson, research VP analysts at Gartner, the office of finance is uniquely positioned to drive these continuous, company-wide financial planning and analysis initiatives.¹
We couldn’t agree more: Transforming the office of finance into an agile, Continuous Planning organization remains a strategic opportunity for every business.
It’s important to note that when we talk about Continuous Planning, we’re not talking about a software product — although technology is certainly one component of it. Rather, what we’re talking about is an organizational capability.
Continuous Planning is a framework for faster, smarter, and agile financial decision making in business. At its core, it recognizes that the nature of business is continuous and, therefore, planning and decision making should be continuous as well.
The antiquated idea that planning is something a business only does once a year (usually as part of an incredibly painful end-of-year process) spells disaster for making future decisions. Why? It’s simple: because constant change and unpredictable events have become the norm, and that makes those annual plans obsolete the minute they’re finalized.
Business advantage in the world we live in comes from being nimble, agile, and smart with our resources. At Planful, we believe business leaders achieve this competitive advantage through Continuous Planning, and that three core truths guide this framework.
These truths, when integrated fully throughout the business, can help business leaders respond to changing business conditions at a moment’s notice — faster than their competitors — to capitalize on new opportunities, protect against threats, and take the lead in their markets.
Truth #1: Compressed cycle times glean greater business insight
Compressing cycle times happens by automating the routine, time-consuming, and laborious tasks that often plague the finance department. Streamlining these tasks provides innumerous benefits to finance teams and the business alike.
Take the financial close process, for example. By automating the financial close process, decision-makers across the business have more immediate, frequent interactions with the most current, trustworthy data. They can quickly understand what’s changed in their business and in the market, and then incorporate those insights into a new budget or re-forecast.
As cycle times compress, planning and decision making occurs faster and more frequently across the whole business. This paradigm empowers the business with speed and agility to pivot and course-correct when business conditions change
Truth #2: Finance needs to be present in every corner of the business
Once cycle times have been compressed, we start to think about how we expand planning and financial decision-making rigor into every corner of the business. We often start with use cases in the office of finance, such as close and consolidation, regulatory reporting, OPEX planning, revenue planning, cash-flow forecasting, and workforce planning.
This is where the real transformation of finance begins.
Once we’ve done this, we’re able to liberate the finance team from the handcuffs of mundane, arduous tasks. This gives them an opportunity to transform from a reactive, service-desk-style organization into a strategic business partner who can lead and drive the culture and vision of Continuous Planning into other parts of the business.
The finance team can then better engage with their business counterparts by delivering bespoke, customized data models, plans, and user experiences that are designed for the way each business unit plans and executes their specific business functions.
Truth #3: Planning should be connected and collaborative
The third truth of Continuous Planning is the connection and collaboration that brings people, data, and decisions together. We all know that effective planning and decision making cannot happen in silos. It’s a collaborative effort that requires input, expertise, and engagement from the leaders and experts in every corner of the business.
So why do silos still exist? One reason is because finance and their business counterparts tend to operate at different levels of data, use different tools, and are focused on different objectives and timelines, all of which adds to a breakdown in communication and collaboration.
This is where technology becomes key. The Planful platform enables real-time connection and collaboration throughout the planning process. It enables people in all corners of the company to understand the context behind the numbers, and captures the thinking behind the decisions. It empowers business teams to share insights and ideas, learn from each other, and understand how their individual decisions and actions impact other departments and the company as a whole. Soon, these business teams start elevating their financial IQ, and make more informed plans and decisions more frequently. And the finance team is at the center of it all, driving the transformation.
Executed together, these three truths empower true finance transformation and equip business leaders with the insights and agility they need to make strategic decisions in the face of uncertainty.
Given the ongoing uncertainty in the world, some might say that planning is dead. In some ways this is largely true: the traditional aspects of business planning — annual and manual — are indeed defunct. In its place, however, has come a more agile, reflexive, and Continuous Planning process.
Today, we have a much more planful way to make decisions.
Ready to explore what Continuous Planning can do for your business? Transform the way your finance team operates in just 30 days!
¹ Gartner: 2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions, February 2020
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