Planning: It’s not always been among my favorite topics, yet it’s an important one. And CFOs like me aren’t the only ones who are going through the exercise. In all areas of the business – communications, marketing, human resources – we’re all running through this process, grappling with trying to read the tea leaves, make sense of the past, and present and project it forward into the unknown with guidance to the business on how to execute strategy.
It’s never been simple – and now, we’re in the midst of a seismic shift that is quickly unfolding. The software industry, no stranger to change, is shifting from the traditional user-based on-premise license model towards the subscription-based cloud, while our customers are experiencing similar changes. Established industries and their models – the hotel industry, taxi services, travel, and manufacturing – are being turned on end, as are the processes within the companies in those industries. Business models are converging and new competitors are rising out of seemingly nowhere.
According to a comprehensive report created by SAP on the trends, opportunities, and predictions about the future of business in the digital economy. By 2018, the data created by Internet of Things (IoT) devices is projected to reach 403 trillion gigabytes annually, and that information will reinvent, digitalize, or eliminate 80% of business processes and products within the next 10 years.
That makes a heady forecast, and you’ll notice that though it’s not for 2016, the timeline is still relatively short. How do you plan in the midst of this? So many things are happening in parallel now, quickly developing in the global economy we operate in. Shifting global politics, macro- and micro-economic trends, regional business performance, currency and commodity price volatility, changing buying behaviors – planning requires that we pull all of these topics together and balance the challenges with the company’s strategy even as all of this develops.
Like so many things in our business world, the planning process is undergoing fundamental changes, and they are coming fast. As the digital economy makes its impact on businesses, CFOs are pushed to make sense and offer guidance with high expectations for speed. Like so many of our customers, we’re in the midst of business model transformation ourselves.
Which brings me back to my task at hand: Planning. Now, I’m applying our latest technology to review and analyze structured and unstructured data. Identifying trends impacting our business performance means I’m reviewing those elements as they’re happening, making decisions based on data culled and reviewed moments before. No more silos for the planning data, and everything in real time. Technology has become people-centric, allowing for collaboration. Finally, financial planning and analysis is being simplified. Modeling, analytics, and data integration are not only an integral part of the planning process, but are actually much easier to handle than in the old days when planning was not among my favorite tasks.
Planning may be an age-old exercise, but it resembles nothing like how it used to be done. It’s a mix of mapping activities and budget against a strategic plan, and building a buffer to account for the unknown as financial targets permit.
This is a long way from the days of looking through spreadsheets generated with info days or weeks old. Planning has become fun. It forms the financial foundation for company transformation in the digital economy. It is the basis on which company performance is being measured to see whether it happens at the right speed and with the right level of profitability and sustainability.
I’d love to hear what changes to planning are you experiencing in your work, and how are you adapting.
For more insight on planning in the digital economy, see How To Design Your Company’s Digital Transformation.