The Power of Continuous Planning for Retail CFOs

For most companies, the days of yearly or even quarterly planning are long gone. A company might put herculean effort into these exercises, but they often go the way of Robert Burns’ “best laid plans” and don’t translate into reality. Even before the overnight “change-it-all-now” moments of the pandemic,continuous planningwas becoming the norm.

Then March 2020 happened and the proverbial rubber met the proverbial road. Stores either closed completely or had to change operating models overnight. Curbside and in-store pickup went from a developing process to a necessity. Safety measures had to be put into place right away. All this had to happen with little to no knowledge of how it would affect the stores’ financials. Remember when we called those times “unprecedented”? Well, I’d say we have a precedent now, but our naive selves of several years ago had no idea how long this would last and how much it would affect us.

Imagine experiencing that as a CFO of a global retail brand. And even now, as the pandemic ebbs and flows, with each wave and variant bringing a potential readjustment, CFOs have to stay agile while attempting to get a sense of how the latest news will impact the business.

All these changes, both inside and outside the store, affect the finance model. Safety measures cost money. Hiring needs and training costs fluctuate. And the fast rise of alternative and business models, such as curbside pickup and ship-to-store, affects forecasts. All this to say, retail CFOs have plenty to think about as they look to the future.

Now, before we get too bleak, there are positives to all this. Shehtaaz Zaman is a director at KPMG, and ona recent Workday Podcast episode,he shared that retail CFOs are finding ways to innovate through disruption. “You’re seeing the advent of more machine learning, analytics, and intelligent forecasting, which makes the forecasting process more dynamic, so you can inform the way the business is moving. This is the key value proposition that finance can offer to the enterprise, if they’re able to tap into it effectively,” he said.

CFOs that are set to thrive in the future are finding a positive path forward, and that path is powered by innovation. And the data backs that up—a recent Workday studyfound that retailers are ahead of their industry peers when it comes to organizational agility.

So, if we take a quick step back, what has always been the dream of every retail CFO (and any CFO, for that matter)? Increasing efficiency, lowering cost, and increasing value for shareholders. Margins are tight, and so are labor costs. This creates financial pressure that CFOs must address to make a positive contribution to the rest of the business (and keep their jobs). A slow, disconnected planning process will just make things worse. CFOs are taking a hard look at their operations and processes, so continuous planning with real, actionable insights is essential. And it’s not just for CFOs—leaders all across the organization can benefit from a connected, continuous approach where they can run scenario modeling and iterate plans at any time.

The results of continuous planning speak for themselves, such as for Specsavers, the largest optical retailer in Australia and New Zealand. Afterimplementing Workday Adaptive Planning, it dramatically reduced the time and effort required to create and consolidate budgets across 60 cost centers, and now it has insights into different cost drivers to control spending and manage growth. As its head of planning, reporting, and analysis shared: “We can make changes to the budget in seconds and understand how increases in head count or salary will impact the business this year and the next. We couldn’t do these things in spreadsheets.”

岁的连续计划正在有条不紊地进行中,and for retail CFOs, this approach could make all the difference toward increasing efficiency, lowering cost, and moving forward, even through disruption. In a space as dynamic as retail, if CFOs aren’t already making continuous planning their new normal, before they know it, they could be left behind.