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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: 3 Steps to Help you Plan for What’s Coming

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This is a guest blog post from our partner Workday Adaptive Planning, written by Bob Hansen. Read it to learn why static planning no longer works and how to make your business agile.

Throughout the world, businesses of every size are feeling firsthand the impacts of instability. In a time of uncertainty, surviving and thriving comes down to how promptly your business can identify disruptive changes and proactively respond to them.

That’s not so easy when your business is mired in static planning—characterized by long planning cycles, immediately obsolete plans, siloed efforts, and hard-to-find errors. Manual, spreadsheet-based planning, budgeting, and forecasting may have worked well enough in a more predictable age. But as we’re discovering that age is long gone.

Even traditional market forces have proven challenging. Technological advances, ever-increasing customer expectations, and smarter, data-driven decision-making put pressure on finance teams to find new ways to operate with agility.

But how do you plan in a way that allows you to respond to such events, from the predictable to the unlikely?

The answer begins — and ends — with active planning.

Why static planning is a disadvantage

The static, traditional planning models finance teams relied on for decades aren’t just a questionable choice in times of disruption—they can leave your business at a grave disadvantage. Businesses hampered by outdated planning processes are often left scrambling to react to changes while more agile competitors outpace, outperform, and outmaneuver them. Look around you: The companies that are performing well at this minute have pivoted—sometimes substantially—in a matter of weeks, sometimes days. Their business agility has become their defining attribute for success.

It’s safe to conclude that many of these agile businesses aren’t weighed down by manual, episodic, and siloed planning. Rather, they’ve likely embraced a more modern approach to planning—planning that’s collaborative, comprehensive, and continuous. These businesses consistently minimize risk, maximize performance, and create competitive advantages because their planning empowers greater business agility.

The difference between static and modern—or active—planning can be stark. Legacy planning tools are typically bogged down by versioning headaches and siloed, instantly perishable data. In contrast, active planning models allow teams to broaden planning data beyond finance, pulling in real-time operational and transactional data from ERP, HCM, and other slices of the enterprise stack—all to make better, data-driven decisions quickly.

Laying the groundwork for business agility

As many companies recognized even before the current crisis, agility is a business imperative—and this more modern approach to planning is the key to achieving it. These three milestones will get you started on your journey to achieving an active planning model.

I. Assess the status quo

Before you map out where you’re going, you need to understand where you are. Take inventory of the current state of your company, more specifically the business planning obstacles keeping you from implementing a more modern and streamlined planning environment. More than likely, these obstacles will pertain to people, processes, or technology, or some combination thereof.

Assessing where you are means getting granular.

  • What do your current business planning processes look like?
  • How long does it take you to create a budget? A forecast? An annual plan?
  • Where are opportunities for improvement?
  • Who are your planning stakeholders?
  • What technology do you have in place, and how well is it serving you?
  • What data challenges need attention?
  • What are the bottlenecks?
  • What could be automated that isn’t?
  • Are there any opportunities for automated data integration?
  • What are you lacking in workforce planning?

Answering questions like these will help you get a clear sense of what you’re working with and where you can improve.

II. Get organizational alignment

Being a change agent is no easy task. That’s why you’ll need to recruit a savvy senior-level advocate to help champion active planning as a worthy and necessary cause. Along with your senior advisor, you’ll need a task force representative of other departments outside of finance, including operations, sales, and HR. Don’t forget to include IT to help you navigate technology needs and coordinate various data sources.

The next move is to align these key people with the business agility cause you’re championing.

How? Build a business case.

You can do this by quantifying the impact that the organization’s current status quo has on the company. What are manual processes and bottlenecks costing your business in time and money? What opportunities are passing you by? Conversely, what would those measurement strategies and KPI models look like if you implemented an active planning model? Try to unearth more nuanced ROI measures—for instance, how cutting budget time in half could give your people more time to run critical what-if scenarios—to really drive home the meaningful change that a modern agility planning model would bring.

Once your team is in place and your pain points recognized and quantified, you can map out a plan for your initial project. Consider focusing your initial effort on a function within finance so you’ll have control over the rollout. Develop a multi-phased plan that clearly communicates goals (both for implementing active planning and for this inaugural project), a concise and actionable plan, and the key metrics for your KPI model. The ability to effectively communicate the why behind this initiative will help secure any executive buy-in you need for the how. A comprehensive and well-thought out plan will go a long way toward achieving that.

III. Expand across the business

As noted above, there’s a strong case for beginning the rollout of your active planning model in finance and focusing on low-hanging fruit to bring early and easy wins. You’re motoring along, mapping projects, tracking and communicating progress, analyzing KPI reports, and making necessary tweaks. Once a rhythm and familiarity are in place, broaden your scope beyond finance. Initiate planning projects that engage HR, sales, or marketing. This is where you begin to extend the use and impact of active planning company wide.

The key in this phase is to strengthen cross-departmental communication and collaboration. Don’t fall into the trap of relying on your technology or tools to do the heavy lifting. It will be easier to realize and maintain success with regular stakeholder one-on-ones, identifying lessons learned along the way, uncovering opportunities for more ingenuity and improvement, and communicating success and congratulations when they’re warranted.

Doing this will help elevate the role of finance to a strategic force within your organization by orchestrating planning throughout the business. Finance will no longer be known primarily for gathering budget numbers and issuing reports. Instead, your business will look to finance to drive the change and innovation needed to not only weather times of uncertainty, but to thrive in them.

Map your way forward

These three pillars lay the groundwork for creating a more agile planning environment—one that will help you plan for what’s coming, whatever that may be. But since it’s merely a foundation, you’ll want to build on it. Stay tuned for additional insights that can help you derive even greater value from your modern planning environment.

Because the only thing certain about the future is that it will reward business agility. With this foundation and the insights we’ll share in subsequent blogs, you’ll be much better equipped to map your way forward into that tomorrow.

This blog post was originally published by Adaptive Insights and appeared on the Adaptive Insights blog.

Read more guest blog posts from Workday Adaptive Planning:

FP&A Done Right: Reforecasting in a COVID-19 World — Best Practices You Can Implement Now

FP&A Done Right: What FP&A Must do Differently to Make Planning a Success

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

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