Planning for a different kind of planning during the COVID-19 crisis and beyond
After everything we went through in 2020, the start of 2021 still holds it challenges.
As we begin 2021, businesses still need to plan for turmoil - and amongst that turmoil, they need to consider scenario planning and cashflow. Gone are the days of setting a plan at the beginning of the year and holding to that plan no matter what happens.
In the face of this kind of uncertainty, finance organizations need the ability to plan for the unforeseeable even when the course isn't clear.
Flexibility is now the buzzword.
The COVID-19 pandemic continues to throw organizations of every kind into very unfamiliar territory. Even with vaccines now being rolled out, no-one knows for sure what will happen next, yet there’s still an expectation that financial planners and analysts advise their business colleagues about the future.
So how should the FP&A function plan for the unknowable? The first step is to adopt an “open to learning” mindset. This lets you accept change as something that happens and makes you open to using this change as a “learning.” And this transforms the perception of change and helps create a more positive culture of change overall.
With this mindset adopted, you have techniques, thinking and technologies that are better suited to unpredictable situations. And you are actively keeping up to date on the latest approaches by learning from peers and trusted partners.
Rethink your long-term planning
You’ve come this far, and yet you still need to be flexible. Flexibility is here to stay rather than something we all had to do to survive in 2020.
So current data and real-time planning are going to remain crucial to success. And that means continuing to integrate systems more and more – FP&A that works seamlessly with ERP, HCM and other solutions – to give you a complete live feed. Being able to understand and more importantly respond to what’s happening now has become fundamental to driving businesses forward. A ‘Set and forget’ mentality for planning is no longer acceptable.
Model a wide range of scenarios
Traditional planning would have viewed the situation we’re currently living through as highly unlikely. This goes to show that you now need to prepare not just for variations of what’s likely to happen but also different permutations of what seems unlikely to happen.
For example, in most countries around the world, the distribution of vaccines is now underway. But that doesn’t mean an immediate return to business as usual. Global rollout will take time and considerable effort. Lockdowns are likely to remain in use in many places for some time. So the next 12 months might not be as different to 2020 as we would all like, and businesses have to be prepared to adapt and plan for this.
And none of us can afford long planning cycles anymore. For some time, best practice has been moving towards continuous planning. Having the capability to work with much closer planning horizons will be critical to survival in the coming months.
Overcome manual processes and update your technology
Believe it or not, many organizations are still trying to manage with manual financial processes. Doing things by hand not only slows down financial operations, but it also means analysts and planners have to wait for the data they need – and when they do get it, it’s often out of date.
Digitizing financial processes can have a revolutionary impact on cash flow and labor costs and improve your financial forecasts’ accuracy and timeliness. Using FP&A software with built-in AI will speed up and boost your number-crunching accuracy and leave you more time for interpretation and strategic thinking.
Now is the time to change
It may not feel like it, but now is precisely the time to make these changes. Uncertainty is here to stay. So, the sooner you gain the ability to process transactions automatically and perform scenario planning with live data, the better.
Making these changes can be surprisingly easy, even under current conditions. With the Software-as-a-Service model, while there are some up-front fees, there’s no capital purchase – you pay for the service when you start using it. And with today’s cloud architectures and homeworking technology, you can conduct implementation projects entirely remotely.