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FP&A Done Right: 5 Signs It’s Time to Rethink Your Process

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If you have been following this blog series, you know that I am a ‘people and process’ guy. I’ve discussed how we become so good at circumventing the process that those workarounds become the process. Keep in mind, however, that a workaround, by definition, is meant to be temporary. When you are stuck in the weeds of your daily tasks, it’s almost impossible to see that your process is askew. If that is the case, how can we recognize that it’s time to step back and rethink our planning and reporting process?

Based on my years of experience in FP&A practice and consulting, I’ve pulled together 5 signs that it’s time to rethink your process. Some of these can be corrected with minor tweaks to our systems while others may require a major overhaul.

Offline manipulation of data

This is a telltale sign that something is off. There are any number of reasons that we do this. I used to do it because my boss wanted a different number than my system-generated reports were producing. Note that I said different, not necessarily right. Oftentimes, we have multiple metrics and KPIs with the same or similar names, but different calculations. Maybe we want to back out a few GL accounts from a certain Revenue metric or we have a series of ‘one-time’ exclusions. (On a side note, that’s an interesting phrase. In my experience, those one-time exclusions are used many times…) It is easier to simply massage the data or create our own math in Excel to complete the task at hand. After all, I can justify anything with a footnote! We should, however, be challenging the intent behind these requests. Perhaps your reporting capabilities are limited and you use Excel schedules to standardize outputs. Sometimes we export data so we can marry it up with data from other systems and reports. At the end of day, when you manipulate data offline, you lose the power of your planning and reporting tool and you turn it into a basic report repository.

I’m sure you can think of many other reasons why you need to manipulate data offline.  I will argue that each of them can be solved with process or system changes. 

No standardization across your business units and functions

This is a big one for me. The lack of standardization and automation of technology and process makes it difficult to streamline your actions and to understand the root cause of an issue. I frequently heard, “Brian, we don’t do it that way. It’s different in my department . You don’t understand.” If you choose your metrics and processes correctly, that is not true. Management and FP&A must have the ability to drill from the macro to the micro. If I see a variance or issue on a report for my global rollup, I need to be able to drill all the way down to the store front or profit/cost center to see what the driver is. If every location is not using the same metrics, calculations, or account granularity, my analysis can be misleading. I love ranking and quartiling reports. By focusing on metrics at the individual locations, I can learn what works and what doesn’t work and then educate the front line on changes they can make that are working for their peers. This only makes sense, however, if you have an apples-to-apples comparison.

Keep in mind that while working towards standard processes, you must ensure you get universal adoption. Without that, you will find that people will revert to their previous methods and will ignore your new process (see the first sign above). 

Last-minute changes to your forecast or budget cause a frenzy of activity

I can still remember the feeling when my phone rang at 5:29pm the night before a big deep-dive review or Board Meeting. You know what I’m talking about. THE call. You finally completed running the last round of budget changes through your process, validated the numbers, copy/pasted all the charts and graphs and you are printing the books. “I’m going to get home for dinner tonight!”, so you thought. Your next call is home telling your family you will be late again because you have another long night ahead of you. It doesn’t have to be this way. 

The reason I dreaded that call was because we didn’t have a clearly defined, connected process that allowed me to make changes quickly and flow them all the way through my system to produce the requisite output. Instead, I knew the pain that was about to ensue. I was going to cobble together my financials and hope that I didn’t miss anything (which I often did). Your goal should be to have a rock-solid process such that you can make changes quickly and then seamlessly push them through. Easier said than done, yes. But, I know you can do it. We’re here to help.

Lack of integrated functionality within your legacy applications

Many times, we have disparate systems and processes across business units, geographies and corporate functions. The concept of a single source of the truth seems like a myth or fable. We may feel as if we are on a quest for fully integrated 3-statement reporting (P&L, BS, CF). The lack of integration is also a root cause for other items that I have discussed. Since our systems do not speak to each other, we export everything to Excel, The Great Aggregator. This leads to using offline schedules to generate reports which leads to a lack of data governance and control which leads to confusion at best and misdirection at worst. There are steps you can take today to improve this while you are working towards a longer-term solution.  Automation of certain items is easier than you think.

You do not have real-time, collaborative tools

Instant feedback is extremely important when timelines are tight and decision support is needed quickly. The pace of business today is so fast that collaboration is becoming a requirement. If you are still driving your forecast and budgeting process with Excel, you have an opportunity for improvement. Stop the proliferation of static Excel files that constantly get changed or broken. There are many tools that will allow you to become more collaborative. The answer to this doesn’t have to be the implementation of one of the planning, reporting, and analytics tools on the market today (although I highly suggest this route). I have seen collaboration accomplished with Google’s suite of products, Smartsheets, Box or other shared access products. The key is that you need a platform that allows you to be nimble and quickly react to changes on the ground. Enable each group to input their items and have them flow throughout the system so everyone sees the impact immediately and can approve or deny and create actions plan. Make sure to create a roadmap that charts your path from where you are today to that future state where you have a planning, reporting, and analytics solution that can provide instant gratification, feedback, and ease of use. 

Did any of these signs strike a chord with you? Most of us probably see these in everyone else’s process around us.  But guess what, others may these signs in your planning and reporting process. As we approach the start of next year’s budget season, set aside some time to question the steps you are about to take. Perhaps it is time to rethink your process.

FP&A Done Right: Creating a Shared Vision Between Finance and IT

Why, Why, Why, Why? – The Hallmark of a Great FP&A Practitioner

Guest blog post from Adaptive Insights: How to Improve Cross-Team Collaboration

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FP&A Done Right: There Is Life After December – The Fixed Forecast Dilemma

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While this may be an old concept, the Fixed Forecast Dilemma still holds true today. Not too long ago, this was a fairly arduous task, even if you wanted to undertake it. This is now primarily a mindset change because today’s planning, reporting and analytics systems make this task much easier than in the past. 

Artificial Wall

We create this disconnect between current year and next year – in our minds as well as in our systems. We spend the bulk of our time focused on our current calendar or fiscal year and create this artificial wall that is difficult to see beyond. When analyzing actions, we think in terms of how it impacts our Total Year period because that is the report deck I need to pull together once I finish my forecast. We don’t always think about how my actions today impact the out months. “That’s a budget problem, I’ll worry about that when I put that hat on,” I used to say.

Our systems are created to support this philosophy as well. We put our forecast and our plan in separate scenarios which makes the divide even deeper. This Year. Next Year. 

FP&A Done RIght: The Fixed Forecast Dilemma

As you know by now, I spent many years in FP&A in the car rental business. We initially used the standard January to December forecast period. We started with our annual budget. January was always a good month; there’s no way we were going to show a number different from the budget we just spent so much time on, so it was an easy ‘copy/paste’ job to our Current Estimate version. As the months and quarters progressed, we layered in the actuals and updated the remainder of the year. Nothing more, nothing less. This was a short-sighted process that led to increasingly limited visibility. It was as if we weren’t going to rent a single car on January 1st! Don’t get me wrong, I did enjoy the forecast more as the year progressed since I had one less period to create and analyze each month. Come the Aug/Sept timeframe, I actually got home at night before my wife and boys were asleep! The primary issue is that the calendar year construct focuses attention on the accounting year rather than the ongoing operational cycles which can be calendar agnostic. A continuous planning process pulls the two together.

Continuous Planning

Continuous planning cycles allow us to become more strategic in our thinking and give us a visual cue that our business is continuous and there is, indeed, life after December.  It links our operational and financial strategies and goals.  Start using your forecast as a legitimate roadmap which shows your current landscape rather than just a report that you plug back to the annual plan to avoid questions (I may have played that game once or twice…)

The basic idea is that we are always looking forward the same number of months/quarters. As this visual shows, we layer in the actuals but add another period at the end of our forecast timing. This is often referred to as a ‘drop…add’ planning cycle.

The Fixed Forecast Dilemma

This chart shows an 18-month forecast. Your time horizon and granularity (the level at which you forecast your accounts and locations) may be specific to your industry and should be based on the furthest point out that you have solid, actionable operational/finance visibility and needs. Several companies I have worked with use a simple rolling 12 forecast. I used an 18-month rolling forecast since that aligned with my lead times for our vehicle purchases. There are heavy capital-intensive industries which may have 30-year CapEx forecasts. If you are unsure, start with 12 or 18 months. One key benefit to an 18-month continuous planning cycle is that the first pass of your plan for the following year is completed at the beginning of Q3 this year.

Next Steps

You might be thinking, “Brian, there is no way I’m going to do 18 months of forecasting. It would take too long.” You may be right based on your current process. You should be thinking about driver-based forecasting at the same time. Focus on the key drivers of your business. Update the rates and drivers and let the system do the work. Also, start to question the granularity of your forecast. Do you really need to forecast every GL account or every store front, department, or business unit? We fool ourselves into thinking that more detail somehow equates to greater accuracy. I would argue it’s the exact opposite. Implement the continuous planning cycle along with these business process changes and you will not spend any more time on your forecast than you do today. But you will have gained more insight into the needs and expectations of your business.

Whatever you do, remember that January 1st follows December 31st every year. Don’t wait until the last minute to see what’s on the other side of the wall. 

FP&A Done Right: Creating a Shared Vision Between Finance and IT

Why, Why, Why, Why? – The Hallmark of a Great FP&A Practitioner

Guest blog post from Adaptive Insights: How to Improve Cross-Team Collaboration

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FP&A Done Right: Creating a Shared Vision Between Finance and IT

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I have seen the extremes of the Finance/IT relationship during my career as an FP&A professional. When I first started navigating the Finance space, any and all systems were ‘owned’ by IT. That’s simply how it was. There was this love/hate relationship between the two and we each thought of the other as a necessary evil. We learned to live together but there was this constant tug-of-war over the constraints of the project management triangle; time, cost, and scope. As Financial systems became easier to administer and Finance professionals became more tech savvy, the pendulum shifted and we started to move ownership of certain financial systems to the Finance team itself. I hired technical resources in my team to manage and build my systems since I could control things better that way. Finance began to own the planning, reporting, and analytics systems, but IT still owned(s) the source systems (GL, P2P, AR, FA). I am ok with this.

Planning, reporting, and analytics systems are forward looking and, as such, do not have the same regulations as the other systems. In FP&A, we need to be free to make quick changes and create “what-if” analyses to our hearts content without constantly going through the proverbial “red tape”.  (To be clear, as I’ve pointed out in past blogs, data governance is still very important and this is not the Wild West.) The collective “we” do not have the same luxury with our systems of record, however. Those need to maintain the rigor and tight controls that exist today and, oftentimes, our IT organizations are better suited for that. While I am comfortable with the division of responsibilities today, I feel as if we have separated the two functions too much. In the extreme cases, I have seen this create a disjointed approach to IT initiatives. As Sebastian Grady points out in CFO’s “How to Build a Strategic Relationship with the CIO”, it is very important to create and foster a shared vision between Finance and IT, so you can work with each other rather than against each other. “Finance chiefs and IT leaders should be jointly responsible for aligning technology opportunities with business strategy,” commented Grady. He also speaks about forging a relationship with IT and being “the bridge to a contextually rich CEO/CFO/CIO relationship.”

This should extend beyond the CFO and CIO. Think of this as the CFO’s team and the CIO’s team. FP&A lives at the intersection of the C-suite offices and we are uniquely qualified to forge those relationships. Make sure you take the requisite time to get to know your peers in the other functional areas.  Partner with someone on that team and shadow them during their respective busy time so you get a clear picture of their responsibilities. Once you have that understanding, which only comes from intellectual curiosity, you can work together to align technological initiatives with business strategy. In your quest to drive profitable growth, make sure to stay abreast of new technologies that can help make this a reality. Work directly with your CIO to make sure that the latest IT proposal provides a solid ROI while achieving overarching strategic business goals at the same time. 

Later in the article, Grady discusses how to “flip the IT roadmap on its ear.” He describes how Finance and IT can work together to create an IT roadmap that supports your business strategies and goals. There are some interesting examples in there that are thought-provoking and worth the read. None of those examples will work until you bridge the gap between the functional areas and recognize that you are stronger together. That shared vision must be rooted in mutual respect and “…a joint understanding of financial and technological strategies…”  Once again, clear, concise communication wins the day. 

Read more blog posts in the FP&A Done Right Series:

Why, Why, Why, Why? – The Hallmark of a Great FP&A Practitioner

Guest blog post from Adaptive Insights: How to Improve Cross-Team Collaboration

FP&A Done Right: “That’s the Way We’ve Always Done It!” — Challenge the Status Quo

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FP&A Done Right: Why, Why, Why, Why? – the Hallmark of a Great FP&A Practitioner

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“Why?”

“Why?”

“Why?”

“Why?”

“Why?”

It’s maddening, right? We’ve all been there. Every time you answer a question, another one is immediately fired back. Thankfully, my two sons have grown out of that stage. I, however, have not. If you were to ask me to list the traits of a great FP&A practitioner, Intellectual Curiosity would be at the top of the list. Without that, you simply become a task doer. While “doers” fill a very important role, your entire FP&A team cannot be filled with them.

Intellectual curiosity is what drives you to follow an issue all the way back to its root cause. It is this relentless search for the root cause that will make you successful. Without asking questions, how will you understand the intent behind what you are working on? Without asking questions, how do learn the cradle to grave process? Once armed with the intent and the current process, you are equipped to create and drive change.

Intellectual curiosity is the catalyst for many topics that I have already written about in this series:

Each day, I make it a priority to not only focus on my job responsibilities, but also on the up- and down-stream impacts of them. The key to providing value is to understand how you can impact the end result and improve the process. Without asking questions, you will not achieve that. I attribute much of my FP&A success thus far to my drive and intellectual curiosity.  Don’t just blindly do. There is a time and place for that, yes. But once the immediate deliverable is completed, circle back and ask, “Why?” “Why?” “Why?”

FP&A Done Right: Why, Why, Why, Why? – the Hallmark of a Great FP&A Practitioner


Read more blog posts in our FP&A Done Right series:

FP&A Done Right: “That’s the Way We’ve Always Done It!” — Challenge the Status Quo

FP&A Done Right: Even Google Maps Requires a Starting Point

FP&A Done Right: The Importance of Naming Conventions – Names Really Can Hurt

FP&A Done Right: The Flexibility of Today’s FP&A Systems is Both a Blessing and a Curse

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FP&A Done Right: It’s Time for a Change

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Change. /CHānj/

verb

  1. to make the form, nature, content, future course, etc., of (something) different from what it is or from what it would be if left alone
  2. to transform or convert

noun

  1. the act, process, or result of changing
  2. a transformation or modification; alteration

Seems simple enough, right? Not by a long shot. One of the two big C’s you must be prepared to facilitate is Change (Communication is the second one). I love change. I’m not talking about change simply for the sake of change. We all know there is enough of that. I’m referring to the change that comes about once you recognize that something is missing from your processes. When you realize there is a better, more efficient way to achieve your goals, step up and make the change happen. Be a Change Agent.

Many people don’t like change and you will find individuals who resist at every step. Communicating the changes and the need for them must begin long before the new processes, roles, or systems take place. Crafting a clear message, directed at each level of your organization is key and must be consistently reinforced. When you are in the midst of a transformation, you will become focused on timelines, budgets, and deliverables. It’s easy to overlook something such as change. After all, “that ship has already sailed.  There’s no way we are turning back now. They will just have to fall in line.”

This is another lesson I learned the hard way. Early in my career, I didn’t understand resistance to change. We were changing portions of our revenue planning process to be driver based and I assumed the group would accept the changes because they were told to. At the end of day, what choice did we have? Well, we had several meetings, created a new process, made the system updates to incorporate these changes, and then sent the announcement describing the new process and letting them know that it would be live with the next forecast. Oops. Let’s just say that we didn’t go live with the next forecast. 

The next time around, I learned from those mistakes and found a more successful route for navigating change. I elicited the support of select individuals in different geographies (particularly important for global organizations) and departments. Not only did I choose people who were respected and well liked, but I also chose a couple of the naysayers.  Oftentimes, we know one or more individuals who are going to be upset with our changes. Make them part of the solution and add them to your team. That move allowed me to get a preview of the pushback that I could expect once we announced the changes. We were able to chart a path around the upcoming roadblocks and I included those objections in my communications. I then had those team members deliver the communication, so it didn’t appear as if it was coming from the top down.  This was a successful strategy.

Read more blog posts in our FP&A Done Right series:

FP&A Done Right: “That’s the Way We’ve Always Done It!” — Challenge the Status Quo

FP&A Done Right: Even Google Maps Requires a Starting Point

FP&A Done Right: The Importance of Naming Conventions – Names Really Can Hurt

FP&A Done Right: The Flexibility of Today’s FP&A Systems is Both a Blessing and a Curse

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IBM Planning Analytics Tips & Tricks: PA Modeling – The Settings Editor

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This is a guest post from Revelwood’s Shane Bethea.

Did you know that there is a new way to edit object settings in IBM Planning Analytics Workspace (PAW)? The Settings editor is new for PAW and gives the system administrator a clear, easy to use interface to modify attributes, security, and properties for objects such as cubes, dimensions, processes, and chores (where applicable). In the background, the Settings editor is still modifying entries in control cubes such as the }CubeAttributes, }CubeSecurity, and }CubeProperties cubes, but the new interface is much easier to use and a more centralized interface.

To use the Settings editor, right click on Cubes (or Dimensions, Processes, or Chores) within the navigation tree and select Edit settings.

IBM Planning Analytics Tips & Tricks: The Settings Editor

Selections to edit Attributes, Security, or Properties are in the top, right hand corner of the Settings editor that appears. Each interface is displayed below.

IBM Planning Analytics Tips & Tricks: Understanding the Settings Editor
IBM Planning Analytics Tips & Tricks: How to use the Settings Editor
IBM Planning Analytics Tips & Tricks: Learn how to use the Settings Editor

You can easily switch between Cube, Dimension, Process, and Chore settings by changing the value in the drop down list at the top left corner of the Settings editor.

IBM Planning Analytics Tips & Tricks: The Settings Editor in Planning Analytics Workspace

The grid below outlines the different cubes that are modified by the Settings editor.

Understanding the Settings Editor in Planning Analytics Workspace

The new Settings editor widget simplifies your administrative tasks by giving you a single approach to modify many different components within your Planning Analytics environment. Stay tuned for more entries covering the other modeling widgets.

IBM Planning Analytics is full of new features and functionality. Not sure where to start? Our team here at Revelwood can help. Contact us for more information at info@revelwood.com. And stay tuned for more Planning Analytics Tips & Tricks weekly in our Knowledge Center and in upcoming newsletters!

Learn more IBM Planning Analytics Tips & Tricks:

IBM Planning Analytics Tips & Tricks: Creating Selectors in Planning Analytics Workspace

IBM Planning Analytics Tips & Tricks: Creating Buttons in Planning Analytics Workspace

IBM Planning Analytics Tips & Tricks: Synchronizing Selectors in Planning Analytics Workspace

Need more guidance? Take a look at our IBM Planning Analytics Training services and our Customer Care Program.

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FP&A Done Right: “That’s the Way We’ve Always Done It!” – Challenge the Status Quo

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“That’s the way we’ve always done it.” “I don’t know, we just send it to them every month.” AHHHHHH! Stop it! When I get that response; it is like fingernails on a chalk board to me. It sends shivers up and down my spine. FP&A needs to add value at every step of the process. Focus on the up- and down-stream impacts of everything you do and make sure you understand the intent behind what you are doing. Without that knowledge, you blindly repeat tasks month to month. Don’t simply be a “doer.” Doers are easily replaced. Make your voice known and focus on those tasks which connect data to strategy and action.

Challenge the status quo. At a minimum, question it. Take the initiative to speak with your CFO or manager about something that doesn’t make sense to you. Ask them how they use the data you provide to drive the company. Worst case? They blow you off, but now they know you are interested in learning more to try and help them. Best case? You get an advocate who can help you drive change. Give it shot. Don’t just do. Think and understand.

FP&A Done Right: Challenge the Status Quo

One day, I was at my wits’ end. It was going to be yet another long night pulling data together and validating/manipulating numbers to create reports. Out of desperation, I went up to the C suite and asked if the CFO was available. I told her that the team worked late (again) and we had not yet created this one particular report that we provided her monthly. “Would it be ok if we didn’t send this until tomorrow?” I asked. This was one of those reports that was a bear. It took a couple of us many hours to pull together data from several other reports (some of which had not yet been created), massage and tweak it, add commentary and validate. Her matter of fact response, “I don’t even open that report any more.” Then she walked in to the conference room and left me there standing in the hallway wondering what to do with all these newfound hours in my week! I actually started to laugh right there in the hallway.

I learned a valuable lesson that day. Ask questions. Challenge the status quo.

Read more blog posts in our FP&A Done Right series:

FP&A Done Right: Even Google Maps Requires a Starting Point

FP&A Done Right: The Importance of Naming Conventions – Names Really Can Hurt

FP&A Done Right: The Flexibility of Today’s FP&A Systems is Both a Blessing and a Curse

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FP&A Done Right: Even Google Maps Requires a Starting Point

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Current Location. Destination. That’s it. That is all you need to provide your favorite mapping app for it to create a route. No current location? You will not know where to begin or how long it will take to get there. No destination? You will drive aimlessly with no end in sight. Your finance transformation or business process improvement is no different. We all recognize the need to determine our future state. But you also need to spend time understanding your current state so you can create a road map detailing how you will achieve that future state. How will you attain your long-term vision if you don’t know where you are starting from?

FP&A Done Right

Oftentimes, we simply jump directly to our desired or future state process discussions and then believe we can move straight into implementing those changes. Who cares about the current state, right? I often hear, “Brian, we don’t need to spend time on our current state process. We already know what it is.” Really? Are you sure? I had myself convinced of that same thing…right until I hit my first roadblock.

I was sure that I knew what each group did during the forecast process. After all, I created many of the schedules and reports that we used and personally trained the teams on every step. While discussing why it took so long to create one of those data input schedules, I uncovered that the functional group took the source data and “massaged” it a bit (deleted rows and columns, inserted and renamed items, etc) to put it in the format they were used to seeing. Then, they sent the file to someone on my team who simply undid much of the previous work and changed it back so it fit our process! We had no idea that the format we preferred was actually the initial extract of the source data. I happened to walk by someone’s desk at just the right time and saw something on their computer screen. After a few questions, we significantly reduced the time required to generate the same sheet.

Don’t underestimate the importance of spending adequate time mapping out and truly understanding your current state process. Don’t fool yourself into thinking that “the process” is being followed 100% of the time. Make sure to uncover those pesky little shortcuts that people take to circumvent the process. Uncover the waste in your current process and then create a future state that eliminates it. I can ensure you that time spent upfront can payback multi-fold during your transformation.

Of course, you could attempt to implement your desired future state without first understanding your starting point. If you do, call me after you are over budget and too dizzy to continue. I’ll be happy to help and I promise to do my best not to say, “I told you so.”

Read more blog posts in our FP&A Done Right series:

FP&A Done Right: The Importance of Naming Conventions – Names Really Can Hurt

FP&A Done Right: The Flexibility of Today’s FP&A Systems is Both a Blessing and a Curse

FP&A Done Right: Finance as the Conductor

FP&A Done Right: You Can’t “System” Your Way out of This

FP&A Done Right: Introduction

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Can You Recover From Static Planning by 2020?

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This is a guest blog post from Rob Hull, founder, Adaptive Insights.

Scramble like hell to pull together a budget. Execute against that budget regardless of changes in the business. Repeat the budget scramble in 12 months.

If your corporate planning process still looks like this, then you’re likely stuck in static planning. By that I mean a planning, reporting, and analytics process that’s siloed, largely manual, almost always built around spreadsheets, and constrained by limited insights into the operations of the business.

Static planning may appear to have served you well for years; in fact, for decades it was the standard way for all businesses to plan. It worked, until it didn’t.

In the past few years, the world has gotten smaller, faster, and more data driven. And whether they know it or not, organizations that plan poorly are operating on borrowed time. That’s because the requirements for effective financial and operational planning, reporting, and analytics have risen sharply and suddenly, spurred by compounding changes that threaten to overwhelm businesses that can’t operationalize new strategies to navigate them. These changes include spiraling operational complexity, growing amounts of inscrutable data, disruptive new digital-native competitors, and ever-growing customer expectations.

Navigating constant change

Any one of these changes would prove challenging. All of them together require a significant leap for any business.

Take data growth. As my colleague Tom Bogan noted recently, 90% of all the world’s data didn’t even exist two years ago. So within two years—close to the end of 2020—your business will likely be trying to manage and make sense of twice the volume of data you’re working with today.

Static planning is a poor fit for this new age of data proliferation. Businesses that base their decisions on instinct, rather than data-driven insights, tend to be less agile. They respond sluggishly to changes in the business or market—if they respond at all. Compare that to data-driven businesses, which on average grow a healthy 30% annually. Very few businesses that rely on static planning will successfully navigate our rapidly changing business world. You can’t chart your way forward through constant, rapid change by being slow, rigid, and myopic in your decision-making process.

The good news is you can recover from your static planning environment before it’s too late—before your competitors outpace you or before events overtake you. You can be one of the nimble, data-driven businesses that are the leaders of tomorrow.

The answer is active planning

Active planning is different from static planning in three key ways.

  1. It’s collaborative. It allows everybody in the business to plan and escalates critical decisions to the right people while giving them the information and insight they need to make the right choice.
  2. It’s continuous. Instead of a painful annual planning process that quickly grows stale, active planning is ongoing and infused by a constant stream of trusted, always-current data.
  3. It’s comprehensive. Active planning enables a holistic view of the business, connecting together finance, sales, workforce, and other operational planning, reporting, and analytics and integrating them with ERP, HCM, CRM, and other operational data stores.

Organizations that implement active planning processes are four times more likely to be able to respond to a market change than those still stuck with static planning. That’s a decent definition of agility if ever I’ve heard one.

Active planning by 2020? Start now

If this sounds too good to be true, be assured there are thousands of companies that have abandoned static planning and embarked on their own journey to active planning. They’ve done it by replacing spreadsheets and rigid legacy planning platforms with cloud-based planning solutions built to handle large and varied volumes of frequently changing data, yet are accessible and easy to use by a wide range of business users. And, since they know that their organization and the demands on it will only grow in the future, they’ve chosen technology that scales quickly and painlessly across different systems, locations, and environments. Operating a business is growing more complex, so planning should accommodate that complexity while still being simple enough for virtually anyone to do.

With an active planning environment, you’ll find it far easier to model what-if scenarios so you’ll be ready to course-correct when change happens. You’ll be able to determine your optimal workforce mix while setting sales quotas and drawing territories that keep account reps motivated and productive. And you’ll be able to lower the risks associated with your business decisions because forecasts are based not just on historical trends, but also on real-world, even real-time data and the input of managers closest to each part of your business.

Modern business planning is now a strategic advantage, and in today’s business environment, you need all the advantages you can find. So it follows that outdated modes of planning amount to a competitive disadvantage. Every day you spend mired in static planning is another day you’re allowing your competitors to move ahead, extending the gap between where you are and where the future demands you must go.

2020 will be here before you know it. The 4,000-plus organizations we’ve worked with to adopt active planning will be far more prepared to succeed in a world of constant change. Will you?

 

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