As businesses work to emerge from a period of historic disruption caused by the pandemic, now is a natural time to take stock of what’s happened so far and to anticipate the challenges and opportunities that lie ahead.
For companies on the road to recovery, this means recalibrating sales goals and strategies, forecasting hiring through the end of the year, and aligning expenses with cash flow.
You’d do all this in a typical year, of course. But there’s been nothing typical about 2020. The global COVID-19 pandemic has forced businesses to transition to remote workforces, absorb spikes or declines in revenues, and reconfigure physical worksites.
To make those changes, organizations have to be agile. For finance leaders, business agility in the age of COVID-19 has taken the form of assessing your status quo, reforecasting, and implementing flexible budgets.
In this make-or-break moment, the ability to iterate what-if scenarios rapidly, gain a comprehensive view of the company’s financial health, and make data-driven decisions quickly has separated the strongest performers from the pack. This is what business agility looks like—above all providing a safe harbor to businesses looking to weather the storm.
Challenges for businesses large and small
For many companies already struggling to adapt to change prior to the downturn, or even businesses that were previously successful but that depend on in-person interaction, the pandemic has been devastating. In fact, the number of bankruptcies filed this year has already eclipsed that of 2008. And while the big brands seem to make all the headlines, the nation’s small businesses could take the largest hits. McKinsey predicts that in the United States alone, between 1.4 million and 2.1 million small businesses could close permanently as a result of the first four months of the pandemic.
But amid these challenges, we are seeing how other companies built for agility have swiftly adapted to this new environment. ClassPass, which offers a subscription for discounted single exercise class passes (and would have otherwise been at high risk for a major disruption), has developed a live stream offering, inviting instructors to teach classes virtually and offering clients access to a database of on-demand classes.
Workday customers tap into their agility
The pandemic has forced companies to make future-shaping decisions quickly―sometimes very quickly―and adjust constantly. In this hothouse of change, having the right tools and processes makes all the difference.
As the COVID-19 pandemic raged, healthcare system ChristianaCare managed to convert its annual budget process into a more responsive monthly forecasting cycle.The organization’s finance group achieved this not in a predictable time frame of four to six months, but in less than a week. Now, says FP&A Director Kevin Kain, ChristianaCare is prepared to face an uncertain future with the kind of confidence that only comes from agility. Says Kain, “We’re ready for what’s next.”
ChristianaCare is among thousands of Workday Adaptive Planning customers actively making decisions with the help of modern, cloud-based modeling, forecasting, and scenario planning. In fact, since the emergence of this global pandemic, modeling and reforecasting on our cloud planning platform has increased 15 times on average.
Commercial flooring solutions leader Diverzify offers a powerful example of a company that came into this era of disruption prepared. The company prepared multiple scenario plans for finance, workforce, and operations based on possible downturns that could impact construction and real estate—two industries that drive much of Diverzify’s business. “It was important for us to have recession models,” notes CFO Julie Bishop McCollum. When the COVID-19 pandemic emerged as both a health and economic threat in early 2020, the finance team pulled out its models and got to work. “We put one of them into action in early March. At the time, we didn’t know if construction would be considered essential. So we had to be ready.”
Using those scenario plans, executives knew exactly what they needed to do. Careful, decisive cost-cutting and limited workforce reductions kept the company operating without interruption. And even now, Diverzify plans to quadruple its size over the next three years.
How agile is your organization?
You’ve most likely found your footing since the pandemic began, and hopefully you’re preparing to come out on the other end with a viable recovery plan.
There’s never been a better time to find out where your business agility stands—and just as critically, where you can improve. To help you kick-start your agility journey, we’ve developed the FP&A Business Agility Assessment. By answering 14 simple questions about your planning practices, you’ll receive a custom report outlining your agility score and rating, a visual representation of your strengths and weaknesses, and a plan of action to help guide you forward. It’s a comprehensive game plan tailored to your unique planning strategy environment.
Taking the FP&A Business Agility Assessment may seem like a small step forward, but as you’ll soon discover, it offers an essential starting place on the road to a more agile future. And now, as all our vulnerabilities and opportunities for improvement are front and center, the last thing anyone wants is to find themselves without a plan.