Less than a year ago, the biggest obstacle for any finance team would have been the relatively predictable issues of market volatility, changing regulations, emerging competitors and evolving business models.
The dynamics have drastically changed since then, because of one of the worst crises this generation has seen – a global pandemic. If finance teams previously found it difficult to deal with routine challenges, disruption has now increased exponentially. This new reality means it’s much more difficult for any finance team to succeed without agility and strong forecasting capabilities.
The management of volatility in any market and the associated risk factors have grown exponentially – adequate planning was important before, but it is doubly so now. The world before the pandemic seems a lifetime away – new businesses have been formed, old ones are restructuring, and finance leaders are facing challenges they’d never previously heard of or planned for. According to the recent Gartner report, “How to Get the Most Out of Your Cloud FP&A Implementation in Times of Crisis and Opportunity”:
“Covid-19 has disrupted most organisations, negatively affecting business performance and making existing plans unachievable. Organisations must replan and reforecast while increasing forecast frequency in order to produce a new financial plan that matches the new business environment.”
Most pre-Covid-19 planning mechanisms have effectively been rendered obsolete; the challenges we face today were not even in consideration and the plans we were following are no longer relatable. The risk magnitude has broadened, a lot of new factors have come into play and now we need to come up with solutions for a whole new set of problems.
Replanning and reforecasting have become imperative for organisations across a breadth of industries. Only with increased forecast frequency can the office of finance continue to operate effectively – frequent reforecasting and replanning is the new norm.
Considering the changing dynamics of finance, disruption management is predictable, yet for many businesses is not yet utilised to its full potential. Overcoming obstacles to future growth depend on achieving greater agility with adaptability.
Choosing the right tools
One of the major reasons finance teams fail to perform is by not adopting the right tools for the job. Conventional Excel spreadsheets are no longer fit for purpose when it comes to complex financial planning and analysis. Frequently changing business dynamics and large data sets require a more complex and agile solution for accurate results. Flexibility with a collaborative cloud-based planning toolset is now a must-have, in order to facilitate forecasts that update in real time when new data is available.
The right planning software, such as Axiom, can support finance teams with all the right ingredients for success in these turbulent times. The office of finance needs a customised, purpose-built solution with a structured reporting system specifically designed to meet the requirements of FP&A. Adopting a single high-performance tool that provides insightful financial reporting will enhance the overall performance of any finance team and enable better decision making. In the report, “2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions,” analysts Robert Anderson and Jon Van Decker share:
“Solutions blending core financial management and FP&A will soon provide new levels of agility and transformational value. Enterprises seeking a unified platform for their strategy will be increasingly attracted to these solutions.”
Taking the right actions
Once you have equipped yourself with the right tool kit, you need to harness the insight it provides to take appropriate action. No matter how advanced your planning toolkit is, the way you utilise it with a practical approach towards your objective is what matters. A precise planning process based on accurate reporting and clearly defined goals is required.
When you are equipped with all the right tools and are using them effectively, the performance of the finance team will improve exponentially as you refine your processes over time. CFOs can not only build their own skillsets, but also foster a confident team with effective agile planning and decision-making skills.
Conclusion
When your team have the right FP&A tools and have taken the time to embed those tools properly in the heart of their operations, the office of finance is equipped to succeed. The key is to partner the implementation of a cloud-based planning system with the understanding and vision to maximise the benefits the platform can provide.
At Axiom, we not only equip finance teams with the tools they need to succeed, we help you to embed them successfully in your organisation. To find out more about our suite of software and supporting services, get in touch by calling +44 (0)1932 548 465, or email us at hello@verostone.com