10 Critical Considerations when Modernising Finance
26 May, 2022
Chief Sales Officer: Sales and Marketing
at Decision Inc. Group
Financial planning and analysis (FP&A) is a critical part of any business. It helps managers make informed decisions about where to allocate resources and how to best grow the company.
FP&A also provides vital insights into a company’s financial health, allowing for the early detection of issues and opportunities. To be successful, FP&A must be integrated into all aspects of the business, from strategic planning to day-to-day operations. This requires a close partnership between FP&A professionals and other members of the organization. When done right, FP&A can provide tremendous value to a company. When done wrong, it can be a costly drain on resources. As such, it is important for businesses to take the time to develop a robust and effective FP&A function.
When it comes to creating a successful strategy, it is important to have a clear vision of the future. This means understanding where you want to be and what steps need to be taken to get there. It is also important to have a roadmap in place that details how you will achieve your goals. This roadmap should be realistic and achievable, and it should be reviewed and updated on a regular basis. Without a clear vision and roadmap, it can be difficult to make progress and achieve your goals. Therefore, if you want your strategy to be successful, make sure that you have a clear view of the future and a detailed plan for how you will get there.
1. Move to continuous Planning and Modelling
If you’re anything like me, then you’re always looking for ways to improve your productivity. If that’s the case, then you should definitely consider moving to continuous planning and modelling. Continuous planning and modelling is all about making small, incremental changes to your plans and models on a regular basis. This approach has a number of benefits. First, it helps to keep your plans and models up-to-date, which can save you a lot of time and effort in the long run. Second, it forces you to think about your plans and models on a regular basis, which can help you to spot errors and potential improvements more quickly. Finally, it can help to build a culture of continuous improvement within your organisation. Obviously, there are no hard and fast rules when it comes to continuous planning and modelling. However, if you’re looking for a way to improve your productivity, then it’s definitely worth considering.
2. Use Extended Planning and Analysis (xP&A) to drive integration between finance and operational planning
In any organisation, it’s important that the finance and operations teams work together closely. After all, they both play a role in ensuring that the company runs smoothly and meets its financial goals. However, this can sometimes be easier said than done. That’s where xP&A comes in. xP&A is a tool that helps to drive integration between finance and operational planning. It does this by providing a common platform for both teams to use, allowing for better communication and collaboration, as well as increased visibility into each other’s work.
As a result, xP&A can help to make sure that finance and operations are working together seamlessly, resulting in better decision-making and improved overall company performance.
3. Leverage enterprise planning to drive Finance Transformation
Finance transformation is a broad term that typically refers to the process of rethinking and redesigning the finance function in order to achieve specific goals, such as increased efficiency, cost savings, and improved decision making. In recent years, enterprise planning has emerged as a key enabler of finance transformation. Enterprise planning is a holistic approach to planning that takes into account all of an organisation’s stakeholders, objectives, and constraints. By leveraging enterprise planning, finance organisations can develop more effective plans that are better aligned with the overall strategy of the business. In turn, this can lead to improved financial performance and a competitive advantage for the organisation.
4. Enterprise Planning as a strategic tool, not just a process
As any business owner knows, planning is essential for success. A well-crafted plan can provide a roadmap for growth, set tangible goals, and help to secure funding. However, all too often, planning is seen as a burdensome process rather than a strategic tool. The result is Often, plans are created with the sole purpose of satisfying investors or shareholders, rather than serving as a driving force for the business. This narrow focus can lead to plans that are inflexible and unresponsive to the ever-changing needs of the business. To be truly effective, enterprise planning must be seen as a living document that evolves along with the business. It should be used to identify opportunities and challenges, set priorities, and allocate resources. Only by adopting this holistic approach can businesses hope to achieve their full potential.
5. Manage and reduce the risk of system downtime, improve stability and reliability
System downtime can be a frustrating and costly experience for any business. In order to avoid or minimise the amount of downtime, it is important to have a plan in place to manage and reduce the risk. One way to do this is by improving stability and reliability. This can be accomplished by identifying potential bottlenecks and addressing them before they become an issue. Additionally, regular maintenance and testing of systems can help to identify potential problems before they cause an outage.
By taking proactive steps to improve stability and reliability, businesses can minimise the risk of system downtime and keep their operations running smoothly.
6. Solutions and enhancements to keeping systems running
System down times can be frustrating for any business. Not only do they lead to lost productivity, but they can also cause revenue losses. Fortunately, there are a number of FP&A solutions that can help to keep systems running smoothly. By identifying potential problems and implementing preventive measures, businesses can minimise the impact of down times. In addition, many FP&A solutions offer enhancements that can further improve system performance. For example, some solutions offer features that automatically redirect resources to keep critical applications running. Others provide real-time monitoring and alerts to help businesses respond quickly to system issues. By taking advantage of these FP&A solutions, businesses can keep their systems up and running smoothly.
7. Connect Operations and Finance to create integrated visibility of the business
In today’s business environment, it’s more important than ever to have visibility into all aspects of your operation. That’s why many companies are connecting their operations and finance teams to create an integrated view of the business. By bringing together data from multiple sources, businesses can gain a clearer picture of what’s going on across their entire organisation. This visibility can help identify areas of improvement, optimise processes, and ultimately improve profitability. In addition, integrated operations and finance teams can provide greater insights into customer behavior and market trends. Ultimately, by connecting operations and finance, businesses can gain a competitive edge and improve their bottom line.
8. Reduce key dependencies on Excel
As the world increasingly moves online, businesses are finding that many of their key processes can be digitised. This shift has obvious benefits in terms of efficiency and cost savings. However, one potential downside is that it can create dependencies on specific software programs, particularly Microsoft Excel. For example, if a company’s pricing formulas are all stored in Excel, then any time there is an issue with the program, it can have a major impact on the business.
To reduce these kinds of dependencies, businesses should consider storing important data in more robust and user-friendly databases. By doing so, they can minimise the risks associated with any single piece of software. In addition, they may find that their overall operations become more efficient in the process.
9. Build continuous forecasts to manage rising costs and supply chain complexity
Companies are under pressure as costs are rising and supply chain complexity increases. Many organisations are trying to get a handle on their spending by implementing continuous forecasting processes. By tracking actual results against forecasts on a regular basis, companies can more accurately predict future needs and adjust their plans accordingly. This approach can help to reduce waste, identify areas of opportunity, and keep costs under control. In today’s challenging business environment, continuous forecasting is an essential tool for managing rising costs and supply chain complexity.
10. Using Scenario Modelling to manage inflationary pressures and fluctuating prices
Many businesses use scenario modelling as a tool to help them navigate uncertain times. By considering a range of possible future scenarios, businesses can make informed decisions that help them to respond effectively to change. When it comes to managing inflationary pressures and fluctuating prices, scenario modelling can be an invaluable tool. By considering a range of potential outcomes, businesses can plan for a variety of different eventualities. This helps to ensure that they are able to stay agile and adapt to the ever-changing economic landscape. In today’s volatile climate, businesses that are able to use scenario modelling effectively will be best placed to weather the storm.
Decision Inc. Pursuit of Progress
Decision Inc. helps organisations develop and deliver the Technology and Digital Operating Model to support their strategy. We create the capability for clients to innovate and compete by connecting the technologies, platforms and data they need to thrive in the Modern Era.
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