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The Rise of Intelligent Financial Planning
Allan Saffy, Executive: Financial Planning & Analysis, Decision Inc.
How Leading-edge Companies Collaborate, Gain insights and Make Better Decisions Faster
The role of the modern CFO is evolving. From accounting specialist to dynamic, business performance leader, CFOs are increasingly responsible for both rapidly identifying business opportunities – and intelligently guiding their companies accordingly. Yet, many CFOs continue to rely on static planning processes – traditional approaches to data collection and decision-making, based on spreadsheets and point-in-time budgets.
In doing so, they may be putting companies at a significant disadvantage. “Because the planning process is slow, sluggish and reactive, business leaders find out too late if they have overspent budget or are losing market share,” notes Sean Rollings, VP, Product Marketing, Adaptive Insights. In short: time is money, and businesses are losing out.
Meanwhile, a second group of forward-thinking change leaders are charting a new course for business. CFOs who rely on intelligent cloud-based planning tools are reaping the rewards of enhanced flexibility, improved collaboration, as well as the ability to react quickly to market changes. Capabilities that translate to the top and bottom line.
How? Intelligent Performance Management solutions (that integrate planning with source ERP, CRM, HR, and payroll) offer companies both the peace of mind and strategic leverage that comes with real-time data, rapid market insights and a single version of the truth across the company. A major advantage in today’s always-on business landscape.
“Everyone takes ownership,” Adaptive Insights’ Rollings notes. “The ability to do innovative planning and analytics and performance measurement will engage more people — including sales, marketing, operations, and HR — in the process of planning, moving away from the static models of the past.”
With a cloud-based intelligent planning solution, business is equipped to not only support collaboration, control, and real-time data access, but also to leverage the key strategic insights needed to compete in today’s fast-paced business climate.
Why Static Planning holds Business Back
According to the Association of Financial Professionals Benchmarking Survey, it takes an average of 77 days for the average company to complete its annual budget today. Why? Poor planning processes, rigidity and inefficiency. Seven in ten (71%) of organisations still depend on spreadsheets for collecting data across the majority of their businesses, according to the FSN Publishing’s 2017 The Future of Financial Reporting survey.
“You have highly skilled finance professionals who are spending 80% of their time gathering data, validating and reconciling data, and formatting data,” emphasises Maneesh Chhabra, Director, Value Engineering and Enterprise Marketing, Adaptive Insights. “It can take organisations weeks to pull together period end variance reports or do forecasts, and that is too long.”
Moreover, once the work is complete, obsolescence soon follows. According to KPMG’s Planning, Budgets & Forecasting: An Eye on the Future report, 62% of respondents agreed that budgets are simply a “point in time” view and don’t reflect what is happening externally in the market. In addition, 56% agree that at some point during the year, their budget ceases to be relevant.
Charting a way Forward
Fortunately, a new intelligent planning model is emerging, centered around cloud-based tools to build accurate planning models faster, reduce errors, foster collaboration and drive better decision-making.
Across businesses everywhere, stakeholders are:
- Gaining greater trust in their data
- Empowered to track performance against strategic plans in real-time
- Freeing up finance, pivoting high-skilled teams away from low value-add work
- Improving the accuracy and integrity of finance and accounting data, plans and reports
- Accelerating cycle times for critical finance processes (such as month-end close, operational reporting, planning and what-if analysis)
In short, companies adopting intelligent planning processes are finding themselves better prepared for change. Poised to identify and strike at opportunities for growth, they can operate more efficiently and with greater insight.
Today, capitalising on opportunities to grow is ever more challenging. A highly competitive and increasing global business landscape means old ways of working are no longer yielding the results they once did. Now, the key is change – a switchover from static to intelligent planning, where everyone across the company understands the value of centralised planning tools and how they contribute to faster, more meaningful, more intelligent work.