Integrated Business Planning Results in Agility
Current economic conditions are a stark reminder that organizations must be ready to respond to new market opportunities and threats more quickly than ever before. And while the increasing pace of change is putting more pressure on finance teams, many are taking steps to increase agility and improve decision making. How? By innovating beyond static budgeting cycles and focusing on the detailed business drivers and operational plans that directly impact financial performance.
Sophisticated organizations don’t just set financial targets; they also continually monitor performance and develop processes to dynamically update operational assumptions required for integrated business planning (IBP).
Unfortunately, only 23 percent of finance teams have systems that allow their organization to respond quickly to market changes. Why? Because many organizations still rely on fragmented spreadsheets and legacy corporate performance (CPM) applications to manage their budgeting, planning, forecasting and analysis processes. They spend more time on low-value tasks rather than collaborating with and providing insights to their business partners for key decision-making.
Aligning business plans
Forward-thinking FP&A professionals are pushing the boundaries of budgeting, planning and forecasting across every aspect of the organization. Strategic FP&A groups require the scale to see holistically across the organization but also require the flexibility and agility to investigate and drill down deep into detailed operational data. And, importantly, these FP&A teams no longer settle for legacy CPM tools and manual processes that once held them back. And they are more likely to invest in CPM platforms that offer the scale to develop financial plans at the global enterprise level, but also provide the lines of business with the agility to plan at the level of detail they run their business—all within the same unified solution and experience.
Strategic planning & modeling
A modern, unified Intelligent Finance Platform is ideal to help organizations manage the strategic planning process. With all financial and detailed operational plans living in a single platform, corporate finance and line of business teams can easily analyze information and develop alternative value creation scenarios on the fly.
Corporate FP&A teams can develop baseline plans for organic growth strategies, M&A initiatives and capital plans while dynamically calculating the impact to P&L, Balance Sheet and Cash Flow plans. Quickly create what-if scenarios to analyze the sensitivity of your cost structure, revenues or capital structure to external drivers such as commodity prices and evaluate FX and interest rate exposure.
Financial budgeting and forecasting
Rigid plans and budgets aren’t very useful anymore. Change is constant and organizations require agile planning processes to continually monitor performance and recast operational plans.
A modern, Intelligent Finance Platform can support top-down, bottom-up, driver-based planning, rolling forecast, predictive analytics and other advanced planning techniques. These tools allow finance professionals to collaborate with their business partners to identify opportunities and risks and guide decision making by monitoring the pulse of the company holistically as well as at the business driver level. Sophisticated finance leaders are leveraging driver-based planning to empower business partners to manage their operational plans at the level of granularity they require while also providing visibility into financial results. They can instantly seed budgets and forecasts with powerful predictive models. And with deep operational analytics, Finance organizations are gaining visibility into how sales, production, pricing, insurance or tax changes could affect profitability and future plans.
Integrated business planning
CFOs and finance teams are adopting integrated business planning (IBP) to set organizational strategy and optimize business plans. IBP creates a recurring to analyze financial plans and business drivers vs. operational plans, recent run rates and prior year results.
Modern finance leaders are adopting a platform approach to IBP capable of meeting the needs of today while also providing the ability to expand and adapt to changing business demands without adding costs and complexity. Why’s this important?
Because it gives Finance leaders the ability to quickly evolve their detailed operational planning processes such sales planning, people planning, capital planning and cash planning – all while dynamically aligning to P&L, balance sheet and cash-flow plans.