Strategic agility is a prerequisite in today’s shape-shifting tech-driven world - no debate from business leaders across sectors on that point. But many organisations face a big obstacle as they try to pivot strategy. They can’t quickly evolve their operations and workforce to meet new near-term goals because planning and analysis processes are stuck in the past.
How so? Often disparate, siloed systems across the business necessitate distinct planning efforts, with HR, finance, sales and marketing leaders all moving forward in their separate lanes. But many companies are embracing a better way in pursuit of agility. They’re combining data into a unified cloud-based system to gain wide-angle real-time visibility into the business.
That’s a must for financial planning and analysis (FP&A) teams tasked with forecasting headcounts needed to grow the business in the right directions. In change-ready organisations, these teams are embracing continuous planning, casting aside static annual practices in favour of always-current plans built on real-time data and offering easily iterated what-if scenarios.
But many organisations aren’t there yet, despite big dreams of agility. Half of CFOs say they’re forced to make financial decisions based on gut instinct alone, according to a Workday survey. Why aren’t they using data? They simply can’t access it, due to silos, formatting issues or other issues, the survey found.
The potential benefits of uniting finance and HR to enable better planning are clear. Without accurate data to help forecast future needs, however, managers are left playing a guessing game to decide how many people they’ll need in the months or years ahead.
Tapping the Power of Unified Data
Basing decisions on data-based analyses of anticipated growth (or contraction) and the cost of new employees is not a controversial ideal, to say the least. But it’s only possible if leaders break down data silos separating HR and finance to enable unified workforce insights.
Siloed workplaces don’t only hamper finance leaders and their FP&A teams. HR leaders can find their role focused on tactical headcount planning. But when business units are unified, integrated and more strategic workforce planning in tune with all other business plans—corporate strategy, financials, operations, departmental budgets, and forecasts—becomes possible. HR teams can help ensure the right people are put in the right place at the right time.
Combining finance and HCM into one cloud-based system allows businesses to see not just pieces of the puzzle, but the whole picture. Complete visibility enables FP&A teams to forecast and plan for the talent necessary to sustain and grow the business.
New Planning Processes for the Age of Agility
With real-time data access delivered through a unified system, finance can reinvent forecasting and planning processes to drive agility. The reality is that in today’s business environment, a quarterly or annual planning process is outmoded and often inefficient.
Consider the annual budgeting and planning process. For many organisations, it involves finance leaders examining the past 12 months—consolidating spreadsheets and pouring over reports based on manually aggregated data—to plan the next 12 month’s objectives. By the time the process is finished, the market may change and the plan’s assumptions are out of date. Static planning and a reliance on manual spreadsheets also consumes time, invites errors, impedes insights and blocks opportunities.
In contrast, continuous planning leverages always-available, always-current data. Unlike budgets with hundreds of line items that are produced once a year, rolling forecasts address key business drivers and are aligned to business cycles, not the fiscal year. These forecasts alert organisations to what’s happening right now, allowing leaders to flag challenges sooner and pull levers to course-correct faster.
Integrated cloud-based systems that support continuous planning deliver another key benefit: efficiencies gained by jettisoning static planning processes. Liberated from tedious spreadsheets and manually re-linking models, finance planning teams can spend more time on higher-value work. By automating manual tasks, organisations can cut planning and reporting cycles by 50-70%, and speed up business decisions by 20-30%, a Workday study found.
Financial planning is too important—and too dynamic—to be treated as a once-a-year project to produce a fixed budget and plan. In a constantly changing marketplace, plans need to be dynamic. And given cloud-supported platforms unifying enterprises from a data and analytics perspective, the scope of planning activities can evolve. Indeed, more and more financial planning projects are extending their scope beyond the finance domain into other areas of the enterprise. Gartner has predicted that by 2024 70% of all new financial planning and analysis projects will involve extended planning and analysis—a process that takes company-wide strategic and operational plans and connects them to finance’s plans.
What’s driving all this change is clear enough. Continuous planning and extended planning and analysis allows organisations to more swiftly adapt to shifting market conditions because leaders can make better decisions about operations and workforces faster. And that’s agility in action.
Find out more about how Workday Adaptive Planning helps businesses with driving business agility and success with modern planning software.
Contributed article by Workday Adaptive Planning