• Skip to main content
  • Skip to footer
Revelwood Logo

Revelwood

Your SUPER-powered WP Engine Site

  • Who We Are
    • About Us
      • Our Company
      • Our Team
      • Partners
    • Careers
      • Join Our Team
  • What We Do
    • Solutions
      • Workday Adaptive Planning
      • IBM Planning Analytics
      • BlackLine
    • Services
      • Implementation Services
      • Customer Care
        • Help Desk
        • System Administration as a Service
      • Training
        • Adaptive Planning Training
        • IBM Planning Analytics / TM1 Training
    • Products
      • DataMaestro
      • LightSpeed
      • IBM Planning Analytics Utilities
  • How We Help
    • Workday Adaptive Planning Use Cases
    • IBM Planning Analytics Use Cases
    • BlackLine Use Cases
    • Client Success Stories
  • How We Think
    • Knowledge Center
    • Events
    • News
  • Contact Us

FP&A Done Right

Fueling Business Agility with Continuous Planning

 

FP&A Done Right: Finance’s Role in ESG Reporting

March 3, 2023

By Revelwood

This is a guest blog post from our partner Workday Adaptive Planning. The author, Bob Hansen, explaining how continuous planning enables business agility. 

Each finance leader knows the routine. Every year, as budgeting season approaches, the rest of the business turns to finance in order to make sense of the last 12 months and prepare for the next 12.

First, you look backward, to assess the progress toward last year’s stated objectives. You work with manually aggregated data and consolidated spreadsheets (both often error-prone) to discover results and generate reports. You analyze targets, performance, and spending to provide the business with an accurate reflection of its financial position.

And then you look forward, using that information to plan next year’s objectives. You think about future goals and enshrine them in a firm financial strategy. You make choices, assess trade-offs, and accept sacrifices. You settle on a new top-line target and divide it into contributions between different functional teams.

Then—after spending weeks or months laboring over the annual plan—by the time it’s finished, the market has changed dramatically and its assumptions are out of date.

Case in point: The disruption caused by COVID-19. Or even more recently, an economy with surprising, seemingly contradictory indicators. But there’s a better way: continuous planning.

Looking Ahead

Continuous planning gives financial planning and analysis (FP&A) organizations a real-time view of the business. When decision-makers have the ability to understand what’s happening with the business now, they can accurately model what is likely to happen in the future. Unlike outdated, static planning, continuous planning enables agility with plans that are always current, insight with easily created and iterated what-if scenarios.

Instead of being once-a-year exercises, rolling forecasts happen on a regular cadence. Unlike budgets that may have hundreds of line items, rolling forecasts address key business drivers. And rather than focusing on the past, rolling forecasts act as early warning systems when you’ve drifted off course; they help to raise visibility beyond the traditional budgeting “wall.” By continually updating your forecast with actuals, you’ll be able to quickly adjust the levers that drive performance.

Here’s a three-step plan to help you design more useful rolling forecasts:

1. Choose the right forecasting horizon.

A rolling forecast is aligned to business cycles, rather than the fiscal year. To really help senior management look at the future and proactively handle it, a best practice is to forecast at least four to eight quarters past the current quarter’s actuals. However, there’s no hard-and-fast guideline for the time interval included in a rolling forecast. It all depends on your industry, your business needs, and how long it takes to make decisions about operations, capacity, and spending. 

2. Model your course on drivers not details.

Yes, your annual budget lists thousands of line items, but you need to perform rolling forecasts at a much higher level, or you’ll get bogged down in minutiae and your forecast will become a recompilation of budgets. Rolling forecasts based on key business drivers, rather than masses of detail, also become a “light-touch” process and therefore less onerous for everyone involved. Managers may mutiny if they think that rolling forecasts will require the work of a full budget, but they’ll be much more engaged if they know they can zero in on the few key variables that matter.

3. Sound out multiple what-if scenarios.

The beauty of rolling forecasts is they allow you to model what-if scenarios to ensure your business keeps pace with change and is aligned to your corporate plan. By modifying a few key assumptions and drivers, you can see their effect on the overall plan, such as the impact a price change has on headcounts and cash. For example, with what-if analyses, managers can perform studies that translate contemplated changes in product mix, processes, order parameters, and customer service into the implications for changes in resource supply and spending.

Executing Against Your Scenarios

Executing against your what-if analyses and scenario plans shouldn’t only happen once a year as part of a static annual budget and planning process. A changing marketplace calls for active, continuous planning and monitoring that gives decision-makers the real-time information they need to course-correct as needed. The ability to create scenario plans to assess potential outcomes (best case, worst case, most likely case) is extremely valuable when variables are constantly changing around and within your business.

At a minimum, this means continuously monitoring actuals so you can keep an eye on organizational financial health. It also means keeping track of your leading analytics indicators (e.g., pipeline, customer lifetime value, attrition), so you can identify trends and patterns and recommend course corrections when needed.

To execute against your scenario plans, you need to have access to easy-to-use, flexible, and robust reporting that captures all of the above, and does so on a continuous basis. And when the gathering, reconciliation, and distribution of your reports is automated, you’ll be able to transform reporting processes from a monthly rote exercise to a dynamic, ongoing driver of organizational change.

With a continuous view of the business, everyone in the company will be empowered to plan and see the results of the implementation and the execution of those plans.This blog post was originally published on the Workday Adaptive Planning blog.

More from Workday Adaptive Planning:

FP&A Done Right: ESG – An Imperative for Growth

FP&A Done Right: Forecasting Revenue for Services-Based Businesses: A Growth Factor

FP&A Done Right: The Changing Role of the CFO

Author

  • Revelwood
    Revelwood

    View all posts

    • Categories

      • Awards & Recognition
      • Financial Close & Consolidation
      • FP&A Done Right
      • IBM Planning Analytics Tips & Tricks
      • News & Events
      • Success Stories
      • Tech Bulletins
      • Workday Adaptive Planning Insights
      • Workday Adaptive Planning Tips & Tricks

    Popular Posts

    Authors

    Adam Riskin
    Adam Riskin
    Ailenette Cruz
    Ailenette Cruz
    Alex Goldman
    Alex Goldman
    Ben Alcock
    Ben Alcock
    Brian Combs
    Brian Combs
    Dave Miersch
    Dave Miersch
    Dillon Rossman
    Dillon Rossman
    Gary Leiffer
    Gary Leiffer
    John Pra Sisto
    John Pra Sisto
    Ken Wolf
    Ken Wolf
    Koury Reid
    Koury Reid
    Lee Lazarow
    Lee Lazarow
    Lisa Minneci
    Lisa Minneci
    Marc Assenza
    Marc Assenza
    Mary Luchs
    Mary Luchs
    Michelle Song
    Michelle Song
    Nina Inverso
    Nina Inverso
    Revelwood
    Revelwood
    Robert Nordhagen
    Robert Nordhagen
    Tara Byrnes
    Tara Byrnes
    Wesley DeMarco
    Wesley DeMarco

    Sign up for our newsletter

    Connect

Footer

Revelwood Overview

Revelwood helps finance organizations close, consolidate, plan, monitor and analyze business performance. As experts in solutions for the Office of Finance, we partner with best-in-breed software companies by applying best practices guidance and our pre-configured applications to help businesses achieve their full potential.

EXPERTISE

  • Workday Adaptive Planning
  • IBM Planning Analytics
  • BlackLine

ABOUT

  • Who We Are
  • What We Do
  • How We Help
  • How We Think
  • Privacy

CONNECT

Contact:

25B Vreeland Road, Suite 111 Florham Park, NJ 07932
201.984.3030
info@revelwood.com

Copyright © 2023 · Revelwood Inc. All rights reserved. Revelwood® and the Revelwood logo are registered marks of Revelwood Inc.