Innovative thinking is crucial for accounting professionals to stay competitive in a fast-moving economy, but innovative thinking is often considered a low priority. An analysis of FSN’s recent 2018 innovation study reveals that 11 percent of finance professionals seldom speak about innovation. Additionally, 54 percent said they would like to be more innovative but seldom receive the time, funding, or support from other board members to do so.
In response, many CFOs consider their finance processes may not be able to keep up with developments in the rest of the company, resulting in the possibility that they could fall behind their competitors.
Anaplan for finance does have new opportunities to drive improvements across the organization, but here’s the rub: traditional planning architecture, both on-premises and as point solutions, remains the primary roadblock to achieving true finance transformation.
The following are some challenges to finance transformation, and how a Connected Planning approach may be able to help.
An overview of traditional financial planning
The corporate finance profession used to involve mostly operations of record-keeping and accounting-aggregating, consolidating, and reporting financial information-not so long ago. Since Microsoft Excel hit the personal computer market in the 1980s, decision support professionals have been making a living spinning turntables of formulas, spreadsheets, and cells for reporting on actuals and planning what-if scenarios.
With the evolution of technology and a steady proliferation of big data, spreadsheets began to lose their supremacy as the standard for finance. Their viability and reliability were no longer there, as well as the dimension that they had never had, and this forced modelers to abandon the practice of modelling a business.
Here comes, enterprise resource planning solutions (ERP).
ERP systems revolutionized business processes in the ‘90s with systems that allowed them to be streamlined. However, although ERP supported back-end financial transactions, management, planning, and reporting were not necessarily supported. As a consequence, finance teams are using spreadsheets to keep track of data and to import and export data manually.
Result: problem solved. Before it wasn’t.
This is what came next in the timeline:
- The technological revolution continues. While organizations invest more in front-end solutions, finance must incorporate increasing amounts of data into spreadsheets and inflexible software.
- As globalization expands, economies shift. Through spreadsheets and rigid tools, finance is supposed to gain new insights into evolving business dynamics.
- Demands and markets fluctuate. Financial departments struggle to adapt quickly to market conditions using the same slow software and cumbersome spreadsheets.
In today’s world, complex, uncertain, and volatile business environments peel away layers of traditional architecture and manual processes, causing finance teams to struggle with delivering timely, reliable business insights.
According to Anaplan, connected planning is the process of dismantling information silos so that financial planning, corporate planning, and operational planning can work together efficiently. CFOs who lead the charge in embracing connected planning put their teams at the center of their transformation efforts, empowering them to be better prepared for the future and deliver the following benefits:
- Focus on strategic initiatives rather than data collection
Financial teams spend on average 40% of their time collecting and validating data, 20% of their time maintaining spreadsheets, and 20% of their time creating reports. The remaining 80% can be used to perform analysis and uncover insights that can propel their companies beyond their competitors.
A connected planning model enables financial leaders to engage in value-added work and come up with innovative solutions. Furthermore, it increases confidence in their output through faster, more reliable plans, analyses, and interactive dashboards that encourage action.
- Enhancing forecasting
Many organizations struggle to achieve an agile forecasting approach when they use outdated planning tools and manual processes. In addition to wasting time and money, these methods often produce unreliable results that can undermine business performance.
The capability of connected planning enables finance teams to transform siloed information into readily available, real-time views – enabling organizations to make confident business decisions using better data transparency and visibility.
By connecting planning, budgeting, and forecasting processes in Anaplan, silos between departments can be broken down. Combined with integrated operating models, it accelerates time to insight, action, and control.
- Ensure radical standardization
When you connect your business with consistent data structures, planning methods, and budgeting, you impose a common language. There are many inefficient processes and disparate systems and data sources in most organizations, as well as nonstandard practices and disconnected or ad hoc processes that create risks, like human error, for instance. By connecting data to insight and action, organizations create resilience, simplify operations, and unlock efficiencies.
Not all cloud technologies are created equal
Cloud technology’s emergence has not only eased the financial sector’s burden, but it has also allowed them to take on the role of business partners by influencing business decisions instead of data collectors. Self-service cloud, in-memory, planning solutions provide businesses with effective and efficient tools for developing and executing long-range planning, annual operating planning, and forecasting.
For finance, the bad news is that not all cloud technologies are created equal. Adopting a cloud-based tool that automates FP&A processes represents the first step in a more comprehensive transformation that speeds up operations and strengthens business partnerships.
Finance’s connected planning technology differs from traditional legacy solutions, even those moving to the cloud, as it is not constrained by rigid, hard-wired templates that limit the scope of optimal planning methodologies. In addition, since it functions as a platform, multiple point solutions are not needed, which still rely on spreadsheets to close the process and automation gaps.
Transforming finance with Connected Planning
Using Connected Planning technology within finance can help accelerate the transformation process by connecting processes within the department before connecting plans across the enterprise. The tool’s flexible modeling platform facilitates connecting processes to business drivers that are related to demand plans, as well as aligning corporate objectives with financial plans and operational tactics.
The finance team can continuously analyze business performance and make updates to forecasts and plans in real time while adjusting for market fluctuations. Furthermore, those changes will be conveyed to the entire business via instant communication.
In today’s world, organizations have a tremendous opportunity to completely re-imagine and redefine what they can achieve by implementing next-generation business planning-but you are not going to get an omelet without breaking a couple of traditional eggs first.
Organizations can become market difference-makers by changing the mindset of business to connect finance with other parts of the organization, such as supply chain, sales, operations, and human resources.
Polestar Solutions, the perfect place for you if you would like to extend the capabilities of Anaplan financial services and extend its capabilities further. As trusted Anaplan partners, our customised advisory and support services will help you enhance your existing Anaplan investments.