This is the first of a short series of pieces about the benefits that digital financial transformation brings to enterprise planning.
While CFO's and their FP&A teams are still tentatively working through what the likely implications of Brexit will mean for their businesses, they have been hit with the double whammy of the current coronavirus pandemic. If anything the latter presents a bigger challenge for finance in that the implications of the virus need to be explored through numerous sales and operational planning processes, such as revenue planning, supply chain planning and workforce planning, before they can be reflected in the revenue and expense sides of the profit and loss statement.
Inevitably there are myriad of factors that need to be considered such as what happens to the sales pipeline if the sales team succumbs to the virus; what headcount is required should demand drop and what production levels might be if the inbound supply chain suffers. In some sectors, such as travel and hospitality, business leaders have had to make immediate decisions to drastically cut capacity and shrink headcount that have already led to both profit warnings and a collapse in their share price. No sector appears to be immune with knock-on effects already impacting retailers, recruitment specialists and cinema chains, with some expressing doubt about their ability to survive.
For many members of the finance team, including many CFOs, this may turn out to be the most challenging period of their career where they can seize the opportunity and finally fulfill their remit of partnering with the business to provide invaluable decision support that will help their organisation weather the storm. However many enterprises are still lumbered with a complex mix of disparate planning systems, often consisting of inflexible legacy systems and siloed data sets stitched together with a myriad of offline spreadsheets. As a result, people across the same organisation are resigned to working with disconnected tools that preclude being able to work together on business issues; make decisions with full insight of how their decisions affect both other downstream business functions and financial outcomes; or generate the rapid reforecasts needed to constantly realign the business with an uncertain future.
Put simply, they haven’t got the tools for the job. While other parts of the business have used technology to transform both the way customers can interact with them and their internal business processes, finance has largely stood still when it comes to enterprise planning.
connected planning really delivers - just like erp
Today no company would ever dream of trying to function without an ERP (enterprise resource planning) platform underpinning the entire gamut of business processes from procurement to production, warehousing, sales, customer service and financial management. Implementing ERP systems was the first wave of digital transformation bringing benefits such as improvements in productivity, quality and service and reductions in costs have been proven many times over.
In many ways a connected planning platform is very similar to an ERP platform in that it joins people from different business functions together with plans and data on a single system enabling previously disparate planning processes to be unified, both with each other, and with financial planning. This gives business managers the deep insight needed to make better-informed decisions, with changes made in one domain rippling across the platform in real-time, so the business can make a rapid and concerted response to changes in its markets.
Those companies that have deployed a connected planning platform, such as that of Anaplan, on top of their ERP system have enjoyed quantifiable benefits. An independently carried out study of over 1000 planning professionals finding that 74% of companies deploying a connected planning platform now plan more frequently than they did five years ago and 92% of companies reporting that better planning technology produces better business outcomes for their organisation. These are exactly the type of capabilities companies need to negotiate the current global crisis and thrive when we emerge on the other side.
If you want to find out more about connected planning read our quick guide. Meanwhile stay safe.
Download our White Paper Connected Planning: The Key to FP&A Transformation.
If you'd like to talk to us about how Anaplan can help your business and learn how we help our clients realise tangible return on investment from digital technology, don't hesitate to get in contact.