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4 paths to an agile planning environment

Companies that transformed their previously static planning environments are now weathering this pandemic with notable success. Read on

After the events of this past year, it’s easy for organizations to succumb to the feeling they are behind the curve when it comes to business agility. Because no one planned for what assailed businesses in 2020, many might assume it’s too late to establish a more modern and agile planning process to help navigate current and future turmoil.

That would be a mistake. There’s no shortage of companies that transformed their previously static planning environments and are now weathering this pandemic with notable success. Take Diverzify, a fast-growing flooring services company that established a modern planning environment last year. When the pandemic hit, Diverzify implemented one of the many what-if scenarios it had modeled in case of a downturn. That action allowed the company to course-correct quickly, and now it plans to quadruple its revenues in the next three years.

The experience of more than 5,000 organizations shows that a journey like Diverzify’s can begin at any stage of business agility. Finance transformation is a unique experience that begins wherever you are.

Moving beyond the general ledger

A growing financial trend has emerged. Finance has started shifting gears from its traditional role as keeper of budgets and numbers to a more holistic, strategic planner and orchestrator across the company. CFOs and other finance leaders have recognized they sit at a unique crossroads through which all key business planning data and forecasts flow. Harnessing this opportunity allows finance to ingest this financial and operational data and then analyze it to paint a cohesive, company-wide picture of strategy, visibility, and agility.

What once was known simply as FP&A has taken on new importance to the enterprise at large. To mark this expansion of finance best practices, Gartner recently coined the term xP&A, for extended planning and analysis, predicting that by 2024, 70% of new FP&A projects will extend beyond finance into other areas of the business. In other words, they’ll be xP&A projects.

This makes it even more critical for businesses to assess their current planning environments and consider what it will take to modernize them.

4 paths to a modern planning environment

While in most cases, modernizing planning will begin with finance (since finance is in a natural position to orchestrate planning across the enterprise), your planning transformation can take many paths. Here are the four most common. Review them for ideas on how, when it comes to planning in a world that rewards agility, you should be thinking beyond the general ledger.

1. Financial planning. Since finance is already tasked with the bulk of corporate planning, finance leaders tend to drive planning transformation initiatives. Generally, they focus first on streamlining their own operation by integrating ERP, CRM, and other data into the planning environment, establishing workflows and user best practices, building key models, standing up reports and dashboards, and more. This allows them to perfect processes before taking them company-wide. Once key processes are ready for a broader user base, finance can retain control of planning overall while gaining a holistic view of the company’s financial and operational health, along with the ability to drill down into specific drivers or dimensions. And by bringing stakeholders from other parts of the business into a self-service planning environment, the finance team can free up cycles previously spent chasing spreadsheets, re-entering and consolidating data, and pulling together reports. Not only will this give finance teams time to more fully analyze data and develop what-if scenarios (thus becoming the kind of strategic partner that a truly agile business needs), but it will position finance as a guiding force for enterprise-wide planning transformation initiatives.

2. Workforce planning. Especially critical during times of uncertainty, periods of rapid growth, or both, workforce planning helps companies get a firm grasp on their people, talents, acquisitions, and requisitions. Using a modern, cloud-based planning platform allows HR planners to align personnel to overarching business strategies. Linking workforce plans directly with the corporate plan reduces the need for manual reconciliation and automates an otherwise laborious and time-consuming process. Automatic data feeds covering headcount, salary, bonus, payroll tax, and hours help speed the process further. Now more than ever, companies need the ability to plan, optimize, and adjust their current and future workforce in real time. Some enterprises start their transformation efforts with workforce planning, though most will begin in finance and then extend their planning environment to the workforce.

3. Sales and marketing planning. Too often, sales planning can be a bit of a guessing game—or worse, it amounts to a cluster of unrealistic goals set by management in hopes of inspiring results. Accurately forecasting for demand, or responding quickly to shifts in the marketplace, requires data-driven planning for both the sales and marketing functions. So it’s important to be able to link your sales plan to your corporate strategy, and then visually monitor your coverage and performance in real time. This bottom-up visibility allows you to course-correct as conditions change or when territories or quotas need adjustment. By informing your sales operations plan with financial and operational data inputs from enterprise applications like Salesforce, you can build out multiple what-if scenarios, analyze coverage and gaps, manage capacity, and create marketing campaigns that support and amplify sales goals. Like workforce planning, sales and marketing planning is a popular “second target” in planning transformation.

4. Operational planning. As planning goes company-wide, functional managers begin to see the benefit of automation, analytics, and continuous forecasting as they track both finance and nonfinance performance metrics. It takes a modern planning environment to properly keep up with the cadence of operational planning, which can be even faster than finance, with operational plans and forecasts updated on a weekly or even daily basis. Plastics manufacturer Porex, for instance, operates plants in 65 countries and serves 3,000 customers with 10,000 active SKUs. Using a modern planning environment, Porex can forecast in multiple currencies at the SKU level, by item, customer, sales representative, region, market segment, location, and more. Managers also use the planning environment to plan and track key measurements and business indicators.

Essentials for modern planning

So when it comes time to choose a modern planning solution, what should you look for? Along with supporting comprehensive, continuous, and collaborative planning across departments and business units, your platform should be intuitive and robust enough to analyze all types of data and present it to any audience so they can make smarter decisions sooner.

In addition, look for a solution that provides:
Nearly endless possibilities and configurations. You’ll want a platform-agnostic solution so you aren’t tethered to a limited ecosystem that can’t ingest all of your data integrations. (Though it’s not a bad idea to also seek out a best-in-class open solution that offers even more value within a suite of powerful enterprise applications that offer a seamless, cohesive user experience.) Ensure your platform allows you to create and manage multiple versions of a budget, forecast, or plan. You also need the ability to drill down by various dimensions, including driver, SKU, department, or role.

Tailored access and custom views. Your solution should account for varying degrees of permissions, ensuring the right people see the right information at the right time. For instance, you should be able to easily create custom, interactive dashboards for your C-suite that highlight the KPIs they care about, or focus certain users on just the entries they need to provide. That kind of flexibility helps you safely extend planning across the business.

Real-time data and instant updates. Ensure you can work with real-time data from all your financial and operational sources so you can make informed decisions quickly and confidently. Finding a solution that links functional plans and rolls up all activity into the larger corporate plan will ensure that an update made to one plan flows to all other related plans. This cuts down on the need for version management and the reliance on imperfect, internal communications for each and every change. And, critically, it gives you a 360-degree view of the business.

For a deep dive into what all this looks like in real life, check out “4 Paths to Establishing a Planning Platform,” where we show many of these capabilities in action with Workday Adaptive Planning.

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