Is Continuous Planning the Key for Finance in Times of Disruption?

Most significantly, the recent COVID-19 crisis proved that even the most robust companies in an expanding economy will still struggle to keep pace with fast-moving market trends and disruptions of this magnitude. And although the health implications of COVID-19 were rightfully the top priority, the economic impact of the pandemic is undeniable.

Some organizations had to learn to work entirely remotely, while others had to shut their doors completely. The crisis that ensued shone a spotlight on the need for continuous planning and decision-making.

Finance leaders in particular had a lot to contend with, and even as we begin to see the economy pick back up post-COVID, businesses are calling for better frameworks, tools, and processes to generate real-time data and financial insights.

What is continuous planning?

When it comes to continuous planning, the name pretty much gives it away. The idea behind the concept is that business is continuous – it’s always changing and adapting. Therefore, planning needs to be continuous too.

This is a very modern approach to today’s business world, and it’s crucial for effective financial planning and decision-making in today’s climate.

This strategy is both a vision and a culture.

A continuous planning approach recognizes that business plans are constantly disrupted by changes to market conditions. Because of this, organizations need to be as agile and flexible as possible.

They also need to have their finger on the pulse. They need to quickly reassess decisions, processes, and strategies in order to move with changes in the economy.

How can this be applied to the finance department?

The COVID-19 pandemic showed everyone, but in particular finance teams, that the world can be uncertain and volatile and that this can have a huge impact on the economy in a very short space of time.

Finance teams are integral in developing the short and long-term forecasts of a business and driving strategic decision-making. But large, rapid changes like this can make existing financial forecasts obsolete.

And with changes happening every hour of every day, financial planning needs to be agile and flexible in order to keep up. This requires finance teams to adopt a continuous planning model.

The benefits of continuous planning for finance

So how can you determine whether continuous planning is the key for finance departments in times of disruption? Here’s an extensive look at the benefits of this strategy:

• Continuous planning allows teams to assess the organization’s financial position more frequently
• It also accommodates re-forecasting by offering regular touchpoints. This gives teams a chance to re-evaluate forecasts set out for the next month, quarter, year, etc. and amend these where necessary based on the latest data
• In using continuous planning, finance professionals can keep budget owners from different departments in the loop. This is so important for collaboration and helping each department (and the business as a whole) to reach relevant financial goals
• Reducing the growing pains of businesses by throwing the idea of an annual budgeting out the window and embracing monthly forecasts instead
• What’s more, continuous planning frees up time to focus on the big picture; it helps you to spend less time working on annual budgets and more time on KPIs and larger goals
• This also leads to faster reaction times, as teams have access to more accurate data more frequently
• These processes mean you only need to make smaller incremental changes rather than overhauling entire forecasts or budget plans at short notice
• Finally, continuous planning means CFOs and C-Suite executives can have more meaningful conversations based on the most recent data. This means they can make better decisions based on insights rather than hunches or guesses

Implementing continual planning in your business

As with adopting any new process, implementing a continuous planning model in your organization will take time and careful thought. To help you implement continual planning and to ensure you get the most from this strategy, you should consider the following:

1. Whether your finance team requires additional skills

With continual planning comes an increased volume of data; as such, you need to determine whether your finance team requires additional skills to be able to deal with this. For example, you need people who can take on the role of scenario planners, strategists, data scientists, and analysts.

These skills are important for the future of finance, so before you implement continuous planning, you need to decide if your team has the skills to use this effectively.

2. How to collaborate across departments

Continuous planning involves understanding the key drivers of your organization so you can get forecasts and budgets in place, as well as making financial decisions that best support the overall goals of the company.

This requires collaboration between different departments and getting first-hand inputs from each team. You can then determine what data you need to collect and how this can be applied to help each department reach its financial goals.

3. If you have the right technology in place

Finally, a huge part of continuous planning and collecting/analyzing data in real-time is having the right technology in place to make this possible.

If you don’t have the right tools in place, you need to have a serious think about which platforms to use and which will be the most beneficial for your finance team. You can determine this by doing careful research and looking out for established providers such as Workday.

Further reading

• 8 FP&A Challenges Every CFO Needs to Be Aware of
• Integrated Planning & Analytics (IP&A)
• Plan to Win: Achieving Business Agility in the Age of Urgency

One of the most important frameworks is active, continuous planning.