The current business and social climate has created unforeseen challenges for enterprises of all shapes and sizes. The disruptions, both internally and externally, are unprecedented in modern times. Within the enterprise, the CFO and the finance office arguably face some of the greatest pressures to steer the enterprise in the right direction.
At this time, there are many uncertainties that must be navigated by CFOs and specifically the financial planning & analysis (FP&A) professionals on their teams. The choices are many and include:
- Impact on revenue with disruption within sales channels
- Cash flow position and liquidity management
- Expense management and cost containment
- Best-case earnings projections and guidance based on what’s known of the unknown
Uncertainties and choices to be made
These choices don’t just come to the FP&A domain in a singular form, but as a collection of issues and choices to be addressed holistically. Should we tap into a line of credit to keep our working capital fluid? Will our current cash flow and liquidity allow us to cover short-term expenses and current and future capital initiatives? Can we take advantage of government programs with employee salary assistance? What do we tell our shareholders for balance-of-year projections? Are there opportunities available to assist our customers to succeed?
These issues are faced not only by finance but rather across the enterprise as different groups examine their budgets and potential tactics.
- Does marketing continue with current programs?
- Does the supply chain face disruptions?
- What is the effect on demand plans?
- What does HR propose for the current headcount levels, and how does that affect outputs?
All these individual budgets and models need to be brought together in a single view to enable understanding of the interdependencies.
Collaborative enterprise planning to break down silos
These challenges can easily be addressed by a modern planning paradigm: collaborative enterprise planning. Collaborative enterprise planning involves breaking down silos, allowing plans of all sorts to be linked instantaneously. This way, finance can get the true picture of current fiscal health to advise the best-case scenarios and steer away from poor ones. For example, finance can evaluate a sales plan’s impact on marketing campaigns, or link a reconciled S&OP process to a financial plan. An analyst can determine what headcount plans might impact employee productivity and cash positions.
Finance also needs to be in a position to make decisions quickly. With collaborative enterprise planning, the finance function can move away from scheduled plans. Today, it is no longer tenable to work in an environment where worst-in-class finance departments delay decisions because they are beholden to spreadsheets or outmoded planning tools. Rather, with the right technology on hand, they can simulate the impact of multiple scenarios immediately. They can use modern analytics complemented with predictive analytics and machine learning to support the recommended and best-case outcomes. Dashboards and built-in visualization allow for real-time reporting and an aesthetically pleasing experience for the end users with minimum chance of errors – unlike spreadsheets.
Instant discussion for fast decision-making
Finally, most organizations, including finance, are no longer working within four walls, but rather in a virtual capacity. Collaborative enterprise planning promotes instant discussion during planning and forecasts. Geo-political issues have made an extraordinary impact on commodity prices; this, along with pandemic-related issues, requires collaboration on the fly and consensus on the go. Decisions must be made immediately, not dependent on meetings, voice mails, and email threads.
With collaborative enterprise planning, finance departments can lead their enterprise to the best possible outcome and better results to navigate properly through these trying times. Collaborative enterprise planning enables finance to learn from all aspects of the organization, recommend and evaluate multiple scenarios, make the right decisions – and truly step up to be leaders in the enterprise.
For more information read this report from Ventana Research, “Collaborative Enterprise Planning: Improving the Business Value of Planning and Budgeting across the Enterprise.”