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From Static to Dynamic: How Businesses Can Embrace Agile Planning, Part 2

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In the first part of this two-part blog post, we introduced the key business benefits from replacing traditional, static planning with dynamic agile planning.  In this second part, we will be looking at the key practical challenges to implementing agile planning and how to  overcome them.

The Key Barriers to Agile Planning

Transitioning to agile planning isn’t simple. Most organizations face three primary challenges:

1. Manual Processes: Many companies still rely heavily on Excel spreadsheets. While spreadsheets are great for certain tasks, they become unwieldy when trying to coordinate planning across an entire organization. Manually aggregating data from many sources, fixing broken formulas, analysing budget submissions, and manually coordinating stakeholder approvals consume enormous amounts of time and effort.

2. Lack of Collaboration: Traditional planning often happens in silos. Sales works separately from operations, operations works independently from HR. This disconnection prevents a holistic view of the business and makes strategic alignment difficult.

3. Disjointed Data: Different departments often use different datasets, leading to conflicting information and slow decision-making. Without a single source of truth, organizations struggle to create coherent plans.

How to Move Towards Agile Planning: A Step-by-Step Guide

1. Assess Your Current Situation

  • Understand your existing planning processes
  • Identify bottlenecks and inefficiencies
  • Map out current technology and data challenges

2. Build Organizational Alignment

  • Get senior leadership support
  • Create a cross-functional team including finance, operations, sales, HR, and IT
  • Develop a clear business case that quantifies the potential impact of agile planning and the key objectives to be achieved

3. Focus on effective driver-based planning

  • Identify key interrelationships and shared drivers and KPIs between different business functions 
  • Build processes and models that reflect those interdependencies and support the use of shared assumptions and KPIs
  • Where feasible, replace manual inputs with driver-based calculated outputs enabling faster forecasting and scenario analysis
  • Assign a suitable owner to every key input and output of the planning process
  • Ask budget holders to plan to use the KPIs and metrics that they recognise, can control and therefore can forecast.

4. Prioritise user experience over complexity

  • Focus on key business drivers rather than overly complex models with highly granular input requirements
  • Provide flexibility to add more detail when desired or required
  • Challenge the value of additional modelling complexity

5. Leverage Technology

Remove dependence on spreadsheet-based planning processes and invest in a modern planning solution that offers:

  • Automated data integration
  • Collaborative planning tools offering an intuitive user experience
  • Scenario modelling capabilities
  • Flexible and accessible self-service reporting offering real-time insights

6. Foster a Culture of Continuous Planning & Continuous Improvement

  • Encourage regular communication across departments
  • Make planning an ongoing, dynamic process
  • Regularly evaluate the accuracy of planning outputs 
  • Identify and implement improvements to the planning process and models to reduce any recurring variances

The Future of Planning

The businesses that will succeed in the coming years are those that can plan with speed and flexibility. As the saying goes, “Change has never been this fast, and it will never be this slow again.”

Agile planning isn’t just a trend—it’s a fundamental shift in how businesses operate. It transforms finance from a reporting and governance function to a strategic partner that drives business innovation.

Final Thoughts

Transitioning to agile planning is a journey. It requires investment in technology, a shift in organizational culture, and a commitment to continuous improvement. But for businesses looking to stay competitive in an increasingly unpredictable world, it’s not just an option — it’s a necessity.

The companies that master agile planning will be able to quickly identify opportunities, mitigate risks and turn uncertainty into a competitive advantage.

Are you ready to make the shift?

More from our FP&A Done Right Series:

The Hidden Value of Strategic Planning: Gaining Operational Efficiencies

Budgeting That Works: How to Plan for Success in an Uncertain World

10 Steps to Transform Financial Planning & Analysis: A Guide to a Successful FP&A Implementation

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From Static to Dynamic: How Businesses Can Embrace Agile Planning, Part 1

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In today’s lightning-fast business world, the old ways of planning are quickly becoming obsolete. Remember when companies used to create an annual budget and stick to it religiously? Those days are gone. Modern businesses need a more flexible, responsive approach to planning—and that’s where agile planning comes in.

In this two-part blog, we’ll be looking at the move from traditional static planning, to dynamic agile planning.  In this first part, we’ll introduce the key concepts of agile planning.  In the second part, we’ll look at some of the main challenges to achieving agile planning and how to overcome them.

The Problem with Traditional Planning

Traditional planning looks something like this: Once a year, senior leadership gets together to define strategic objectives and targets for the coming year.  Finance teams then get to work, hopefully together with leaders across the business, to create a detailed budget that’s supposed to guide the entire organization for the next 12 months. After an extended and often painful process, including multiple iterations, the budget is finalised.  However, before the ink is even dry, the market has already changed and the details in the budget are no longer relevant.

Think about how much can happen in a year (or now, even a quarter!). New and disruptive technologies emerge, customer expectations shift, new competitors appear, economic conditions fluctuate, and unexpected global events (like a pandemic or a regional conflict) can turn entire industries upside down. A static, rigid planning process simply can’t keep up.

What is Agile Planning?

Agile planning is fundamentally different from traditional, annual budgeting. It’s a continuous, dynamic process that allows businesses to:

  • Respond quickly to changes
  • Make real-time decisions
  • Adapt strategies rapidly
  • Create multiple scenario plans
  • Maintain a forward-looking perspective

Agile planning incorporates two key concepts: continuous planning and scenario planning.  With continuous planning or rolling forecasts, businesses replace infrequent and time-consuming planning cycles with regular, light touch forecast updates based on the latest business and market trends.  While traditional forecasting often assumes that the world will end on the last day of the current financial year, rolling forecasts are always looking further forward beyond the year end, projecting at least 12-24 months into the future.  As each new month begins, the first month of the previous forecast is replaced by actuals and a new forecast month is added to the end.

With scenario planning, rather than simply focusing on a base budget or forecast, business leaders are actively encouraged to consider multiple alternative versions of the future and the impact on the business from each scenario.  These alternative scenarios could include changes to macro-economic factors, changes to existing markets, entry into new markets, alternative investment decisions or changes to organisational structure.

This increase in forecast frequency and creation of alternative scenario versions might initially sound like more work overall. However, in practice, small regular incremental updates to an already relevant recent forecast is a much easier request to the business than a long and disjointed budgeting process building up a detailed plan from scratch over multiple iterations and usually multiple months.

The Benefits of Agile Planning

When done right, agile planning offers tremendous advantages:

  • Faster Decision Making: Based on scenario analysis already completed or increased speed in generation of new scenarios, companies can respond to market changes in weeks or days instead of months
  • Better Insights: More frequent forecasting using the latest actuals trends, allows for more accurate forecasting 
  • Increased Collaboration: Continuous planning helps maintain an ongoing dialogue across the business, breaking down departmental silos and creating a more integrated and consistent approach
  • Strategic Flexibility: The ability to model multiple scenarios helps businesses assess and prepare for the impact of potential strategic decisions
  • Improved Resource Allocation: Scenario planning allows the business to identify the best investment opportunities for the business, while continuous planning allows resource allocation decisions to be constantly reassessed and revised as required.

While the benefits of agile planning are easy to see, in practice they are harder to achieve.  Catch the second part of this blog post, where we will look at some of these key challenges and how best to overcome them, to unlock the benefits described above.

Revelwood is dedicated to helping the Office of Finance succeed through the strategic use of technology. We have a nearly 30 year history helping CFOs and FP&A leaders modernize and transform the Office of Finance. Our approach is to focus on your success, speak business first and to leverage best-in-class technology that suits your organization’s unique needs. Contact us at info@revelwood.com to start a conversation on how we can help your Office of Finance be thes best it can be.

More from our FP&A Done Right Series:

The Hidden Value of Strategic Planning: Gaining Operational Efficiencies

Budgeting That Works: How to Plan for Success in an Uncertain World

10 Steps to Transform Financial Planning & Analysis: A Guide to a Successful FP&A Implementation

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FP&A Done Right: Rolling Forecasts for More Strategic FP&A

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This is a guest blog post from our partner Workday Adaptive Planning, written by Bob Hansen. Hansen makes the case for dynamic planning, which is better suited for complexity.

When it comes to FP&A forecasting, most companies base their long-range forecasts on static planning processes, rather than more relevant, dynamic plans that reflect the complexities of the business.

Relying on a forecast that doesn’t enable continuous monitoring of company performance, instead of implementing a modern, rolling forecast approach, is like using an old-school road map to guide you on a cross-country trip: Why use a paper map when you can get to your destination worry-free with a car GPS system?

Rolling forecasts—forecasts that are updated typically on a quarterly or monthly basis—can be a game changer. Especially today, amid a global pandemic. They allow organizations to better align with their strategy, perform more-effective business analysis, and derive greater ongoing value from their budgeting and planning processes. Rolling forecasts make organizations nimbler, able to seize potential opportunities, or better prepared for upcoming roadblocks.

Rolling toward a more strategic focus for FP&A

There is an increasing expectation that strategic guidance—which can be generated through rolling forecasts—emanates from the FP&A team. A CFO Indicator report affirmed that need. The survey found that CFOs expect that time spent by the FP&A team on strategic tasks will double by 2020—growing from 11-25% today to 25-50%.

Furthermore, CFOs are looking for their teams to develop the technical and strategic capabilities that support executing approaches such as rolling forecasts. According to the CFO Indicator survey, if the FP&A team could improve only one skill, 29% of CFOs want that skill to be dashboard design and report building, 25% want it to be predictive analytics capabilities, and 19% want strategic modeling of what-if scenarios.

Fortunately, with the increasingly user-friendly experience of dashboard technology, the skills gap is narrowing, which allows more FP&A teams to start instituting rolling forecasts.

FP&A … so little time

So rolling forecasts are a no-brainer? In theory, yes. Yet the near-universal challenge lies in freeing up finance teams to move toward this new approach. There is a significant gap between what CFOs want their teams to be doing and how they actually spend their days. Often-cited research by APQC shows that only 40% of 130 finance executives from very large organizations rated their FP&A capabilities as effective.

Further, our research shows that 75% of CFOs want their teams to have a significant and strong impact on their organization, yet only 46% expect that their team will have that kind of impact this year. The chief reason continues to be a lack of time for strategic planning.

The clear benefits of rolling forecasts

Despite these time-crunch challenges, the benefits of getting to rolling forecasts are clear. The APQC survey showed that organizations that use rolling forecasts are better aligned with unfolding business strategy, are more effective at business analysis, derive greater value from their budgeting and planning processes, and have more reliable forecasts than those that do not use them. The survey revealed that 94% of businesses that use rolling forecasts described their business analysis as effective. Only 50% of those that do not use rolling forecasts described their analysis that way.

Finance leaders need to clearly promote the many benefits of rolling forecasts and how they can directly impact business results. For example, you can produce a cash flow forecast at the end of a rolling financial forecast process—resulting in a consolidated balance sheet and an accurate view of cash flow for the entire enterprise. Getting C-suite buy-in helps pave the way to get the resources and time needed to develop relevant and robust rolling forecasts.

Moving to rolling forecasts is possible at organizations that have executive support and invest in new, cloud-based finance software. These solutions offer easy-to-navigate dashboards and scores of time-saving hacks that can free finance pros from transactional busywork and allow them to focus on more strategic activities that improve business performance.

Like a state-of-the-art GPS, rolling forecasts can go a long way toward helping you get where you want to go—and position FP&A to be a driver of the business, not stuck in the back seat.

This blog post was originally published on the Workday Adaptive Planning blog and appeared here.

Read more guest blog posts from Workday Adaptive Planning:

FP&A Done Right: Three Driver-based Budgeting Tips for CFOs When Change is Imminent

FP&A Done Right: Modernize your Budget Process to Anticipate Change

FP&A Done Right: Reforecasting in a COVID-19 World – Best Practices you can Implement Now

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