Continuous Planning Catapults Finance Forward

Too many enterprises know firsthand the planning challenges that result from trying to achieve business agility during a time of constant upheaval.

Multiple separate spreadsheets for planning and reporting. Complex processes for aggregating operational data. Outdated, episodic forecasting workflows. Little insight into historical business metrics and trends, and how that information might help to assess present and future performance.

Those symptoms of outdated planning are all too common. Yet the obstacles don’t have to be permanent. Modern, more agile processes—including and especially rolling forecasts—can give execs the real-time insights they need to make informed and confident business decisions.

Along with scenario planning,rolling forecastsare a core element ofcontinuous planning. That’s an antidote to traditional planning processes that were designed when businesses could operate at a slower metabolic rate and still succeed. A slower process that’s more manual, episodic, and relegates finance to a largely functional role is no longer sufficient.

Organizations with faster metabolic rates tend to be leaders because they can more quickly react to changing conditions. Compared with those still clinging to traditional ways of planning, leaders are10 times more likelyto react to market shifts with agility and speed.

Making Planning Continuous

一个强大的方法组织改善他们的agility is through continuous planning.

In continuous planning, stakeholders monitor goals, metrics, and milestones for existing priorities. But they also seek to develop new strategic priorities simultaneously. This combination ensures a culture of self-evaluation, innovation, and adaptability.

Continuous planning brings everything together. Finance leaders can connect dynamic, external factors—from macro trends to individual events to internal responses—improving the whole business as a result. This helps finance evolve from its old functional role to a new strategic one.

FSN’s 2021 surveyof finance leaders shows continuous planning is having a direct and beneficial impact on the organizations that embrace it.

As an aggregate, organizations are forecasting more quickly than they were four years ago. In fact, two-thirds of respondents say they can reforecast earnings in less than a week. But the other one-third struggle to turn forecasts around so quickly, and 6% take more than a full month to reforecast.

Faster Planning Is Not Continuous Planning

While all improvements are certainly welcome, they don’t always rise to the level of continuous planning. For instance, 64% of respondents say they could make a minor change—for example, to a new cost line in their budget or forecast models—within half a day. About the same percentage say they can input the change in budget holders’ data-entry templates, which ensure the change flows to all reports.

But when asked if they had to implement a structural change, such as reflecting a new entity, cost center, or product in a hierarchy, the ability to reflect the change across all reports drops to 34%. Only one-third can manage this within half a day, another one-third within two days, and the rest at between two days and more than a week.

What does this tell us? While most businesses can forecast faster than they once did, they’re not necessarily planning continuously.

Continuous planning is more than traditional planning—and faster. It encompasses specific, high-impact activities that give businesses a material advantage. Rolling forecasts are a prime example, ensuring that forecasts remain current and relevant even as conditions change (and they will change). The ability to model rich what-if scenarios, without dimensional limits, allows decision-makers to anticipate what will happen if they increase the price of a product, change suppliers, expand a sales office, recalibrate territories, or modify sales capacity based on seasonality.

plan-execute-analyze周期的今天的成功ssful organizations, continuous planning serves as a bulwark against the havoc that economic and market disruption can wreak from top lines to bottom lines.

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Every business has an internal limit on the amount of change it can meaningfully process, understand, and respond to within a given time frame. Change comes faster and more easily when organizations adopt the right workflows and technologies.

Technology, it turns out, is both the driving force of change and the answer to succeeding in the face of it. Harness the right tools (technology) in the right way (culture), and you have a far greater chance of marshaling the full power of continuous planning.

For businesses yet to adopt continuous planning, it’s tempting to home in on certain features. But you can only get the best out of these tools with the right culture in place. Building up to a higher metabolic rate involves the widespread adoption of certain key pillars. With these in place, you’ll be better positioned to experiment with rolling forecasts, what-if scenarios, and the other game-changing capabilities that continuous planning introduces. That includes:

Compressed cycle times. Shorter cycle times free up finance staff to work on more strategic tasks. Cloud-based automation helps organizations achieve this by accelerating the monthly, quarterly, or annual close. Plans come faster and more frequently. Forecasts iterate continuously. Working from a unified data core, financial planning and analysis (FP&A) teams gain quicker dissemination of actuals and key feedback so they can interact continuously with the latest data. With the planning system and tools, it’s easy for all stakeholders to embrace their portion of an emerging continuous financial planning culture. The result? Actionable insights and near-real-time course correction.

Finance as strategic advisor. Organizations that lack a continuous planning culture relegate finance to its old role as bean counter. That’s because with FP&A teams so busy manually chasing data and reconciling spreadsheet versions, they don’t have time to realize their full potential as a strategic advisor to the business. Flip that picture, however, and apply a continuous planning culture. Suddenly finance has the data, vision, and time to provide real-time business insights for real-time business decisions. What’s more, finance can “lead from the front,” orchestrating planning across the entire organization. And with FP&A leaders closely aligned with wider business strategy, the strategy itself can pivot in nuanced ways to promote nimbler, accelerated decision-making.

A single source of truth. Traditional financial planning is often marked by finance using different datasets than other parts of the organization. This encourages isolated objectives, misaligned timelines, and rogue budgets and plans. But when FP&A spearheads the use of a single source of truth—a unified data core—different teams collaborate more closely and everyone taps the same intelligent data foundation necessary for true continuous planning.

The world is changing faster than it ever has. Next week, next month, and beyond, it will bechanging even faster. Since there’s no way to dampen the pace of change, the only answer is to move with speed and agility as a business. As countless businesses have discovered, adopting a culture of continuous planning helps unlock that agile future.