Part 10, the conclusion of the 10-part “Collaborative Enterprise Planning” series
Collaborative enterprise planning systems and techniques are being continually enhanced, based on “real-world” experiences. But what does the future hold, and how will this affect the way organizations plan and manage performance?
This is always a tricky question. In some ways, the technologies we have today are far removed from what was available 20 years ago – and yet they don’t seem to be that different. In taking a personal blue-sky view of the future, I suggest the following developments.
Integration has always been at the top of the wish list for most FP&A applications. Part of the reason is historic, as applications were provided as discrete systems with their own data and metadata. Over the years, these systems have developed the capacity to share or pass both data and metadata between them, but in a way that’s often not seen by users.
However, that still leads to the duplication of data. Systems in the future will be able to access data directly from source systems (underlying ERP or multiple ERP’s) that may be both internal and external to the organization. This will be a dynamic link, and data will be saved in the model only if requested by the administrator. In this way, prior results will stay static unless a refresh command is issued, which then causes the system to access data directly for the areas requested.
This level of integration will require master data definitions that describe how data/metadata is to be accessed and any transformations that are necessary. Changing definitions here will automatically be replicated through any affected models.
Modeling systems are fairly dumb when it comes to time. Models have to be set up that reflect regular time patterns such as months, weeks, and years. Modeling systems in the future will deal with real dates when it comes to data. These dates can then be used to produce weekly or monthly reports that “know” exactly how to roll up the days into those time groupings. Similarly, you will be able to generate a time series that automatically understand seasonality, bank holidays, whether a week starts on Saturday or Monday, and the like. And if another grouping is required (or you want to compare the same week last year), the system will be able to do it, but without having to copy the data.
Project- and activity-based modeling
Project- and activity-based modeling is not the same as activity-based costing (ABC), but an acknowledgement that the activities of departments or groups of departments have the most impact on organizational goals. The trouble is that activities often span departments and can be expressed in days or weeks – none of which fit well into today’s models that tend to have one dominant dimension. In the future, when combined with date-based modeling, managers will be able to see the impact of launching a new initiative mid-month or delaying it several days. The system will automatically work out what that means for the resources allocated to the different departments and how that will appear over time.
Real-time, dynamic workflow
This last capability will extend workflows so that management processes can be modeled for efficiency and made to respond based on actual/predicted events and exceptions. This will lead to continuous, collaborative planning that will eliminate game-playing and the wasted time in planning for things that are irrelevant.
When will all this happen? Who knows – but it’s FP&A departments themselves that must lead the charge, in partnership with technology companies whose experts really understand the evolving role of FP&A.