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Active Planning: The Answer to FP&A’s Biggest Problem

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Sometimes the first step toward solving a problem is defining it. Give it a name, and the challenge becomes easier to get your hands—and head—around.

Then, if you can identify the clear solution, well, now we’re talking.

That’s the process we recently underwent at Adaptive Insights. We focused on identifying the near-universal problem that vexes FP&A: How can FP&A become more invested in the strategic analysis aspect of finance and engage operations in the planning process?

You know the drill. Finance does most of the work while others are called upon to “submit input.” The process is considered drudgery by many and a necessary evil by others. In addition, it prevents finance pros from adding optimal value to their organizations or reaching their full potential.

Watch the webcast “Put an End to Inefficient Planning Cycles”

So having identified the problem, we gave it a name: static planning.

What is static planning?

With static planning, so much of your time is devoured by manually moving, modeling, and manipulating data that you are constantly forced to compromise. You’re stuck between creating a robust, strategic plan or creating one that’s simply accurate and as up-to-date as possible. Or you’re torn between whether to engage business partners in the planning process or develop a model that truly reflects your business.

All these compromises, day after day, year after year, create a static process that may allow you to deliver on a set of guideposts, but falls far short of driving the business or adding real strategic value. You’re stuck, as one of our customers recently quipped, in digital concrete.

OK, now for the good news. The solution for this pervasive problem is—you guessed it! —active planning, and it can be a game-changer for you and your FP&A team. It is a dynamic approach that attacks static planning with agile cloud-based technology and tools that are easy, fast, and powerful enough to finally put FP&A on offense instead of always playing catch-up.

Active planning means no compromises needed

With the active planning approach, you don’t have to compromise. Instead you can break the concrete with a solution that delivers real strategic insights that keep up with the ever-quickening pace of business.  Active planning allows finance to shift into a leadership and guiding role, instead of being mired in the drudgery of back-office transactional tasks.

As a relatively new vice president of finance at Adaptive Insights, I have firsthand experience into the transformative potential of this shift from static to active planning. For the past two decades, I have been an unwitting victim of static planning. I battled Excel spreadsheets that are time-intensive, error-prone, and brittle. More recently, I’ve worked in organizations that used clumsy legacy systems for financial planning. That meant always turning to IT for endless data requests, a molasses-slow process that sapped the strategic capabilities—and at times the souls—from my finance team.

Then, last year, I joined Adaptive Insights and my world dramatically changed. For instance, when I was first asked to create a specific scenario model, I was amazed how easy it was to get it done in an afternoon. And not just get it done, but to craft the model in a way that allowed us to build out several scenarios. We even had the real-time ability to make adjustments when asked by senior leaders to consider even more possibilities. This, I thought, is how it’s supposed to be.

As you move to active planning three clear benefits start to emerge:

  • Benefit #1: Better collaboration
    Active planning encourages broader participation across the organization, by leveraging technology that makes it easier to establish a single source of shared data and customized dashboards that give users ready access to information.
  • Benefit #2: Comprehensive capabilities
    A single, comprehensive process drives optimization widely across the diverse parts of the business, and the organization. You can reap huge benefits from real bottom-up planning and develop a robust picture of the business.
  • Benefit #3: Continuous planning
    Plans are produced rapidly and can be quickly iterated so ongoing, real-time planning and rolling forecasts become the norm. FP&A can provide insights to help the business respond rapidly to changing market conditions or competitor activity.

The hidden benefits of active planning

Active planning not only changes how you do your job, but also has the potential to recast how finance is viewed throughout the organization and strengthen relationships with business partners.

Let me share an early example from my work at Adaptive Insights. Recently, Fred Gewant joined Adaptive Insights as our chief revenue officer, a role in which he leads our field organization, including sales, channels, customer success, and professional services. About a month into the job, Fred requested significant changes to the sales staffing model. And he wanted them soon.

Now this is certainly a reasonable request from a new leader. Yet in my previous static-planning life, Fred’s ask would have presented a real challenge for me and my team—and the fact that he wanted several scenarios would have all but sent me over the edge. Getting the necessary information for a new model would likely require multiple data requests from IT, slowing the process. Or we’d be faced with updating and manipulating multiple spreadsheets, with the awareness that existing spreadsheets already distributed to the sales team would soon be out of date as well.

The likely result: Right from the start, my relationship with this leader would have been tested, either with him feeling that I wasn’t able to quickly deliver the information he needed, or with me fearing I wasn’t meeting expectations or resenting the amount of time required to meet the request.

A great time to be in finance

With active planning, however, our relationship was strengthened, not challenged. With updated data readily available, we were eager to make the adjustments and build out several scenarios. My team also had the confidence to share insights and perspective based on the models developed. Bottom line: We were able to collaborate as strategic partners, sharing the goal of delivering better results. We ended up in a great place.

These types of wins position FP&A to be the strategic business partners we’ve always wanted to be.

My mantra lately is that it’s a great time to be in finance. And I really believe it to be true. Never before has FP&A had the tools, technology, and talent to deliver like we can today. With active planning, you can take your team, your career, and your company to the next level.

Problem solved.

Kerman Lau is vice president of finance at Adaptive Insights.

Watch the webcast “Put an End to Inefficient Planning Cycles”

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