This has become increasingly important, especially in the current climate, with the effects of Covid-19 on the business landscape, and a breadth of industries facing a prolonged period of uncertainty and continuous change. These changing dynamics have further increased the importance of financial intelligence for businesses to survive. To this end, innovating financial intelligence is essential for businesses to grow.
For budgeting and planning processes, financial intelligence should sit at the heart of the business. In times like these when uncertainties are common, agility and accuracy are of paramount importance. In this environment, finance leaders need to stay up to date with quickly changing business perspectives and come up with new strategies at a rapid pace.
Since the onset of the pandemic, many businesses have faced disruptive changes. This has helped in highlighting the shortcomings of the current conventional business operations and created room for opportunities of adaption and innovation. Here, financial intelligence has become integral for organisations as they require more frequent forecasting, with a high level of data accuracy, but without losing agility and timeliness in the planning process.
In the post-pandemic business environment, businesses need to be more vigilant and responsive. As shutdowns have drastically affected organisations globally, many business leaders opted for new methods or altered their existing financial models to attain an up-to-date and frequent overview of their performance. Monthly and quarterly cash flows are shifted to a more frequent cycle; rolling weekly projections and real-time data has become the new norm. Finance teams are forced to create a faster and updated sales projection forecasts system, as business landscapes are changing at a much faster pace than before.
This process has helped finance teams in discovering the flaws in their current systems, and has motivated them to shift towards a more robust and speedy model. This indeed was difficult in the beginning as many conventional manual processes were the comfort zone for staff. However, the manual process of transferring data from their ERP system was not as agile as it needed to be. As more aspects of the data were required to be highlighted, these systems were unable to provide the full picture. The standard budgeting and planning tools were unable to meet the demand of this new ever-evolving business environment.
As finance teams were not equipped to deal with these changes rapidly, it created bottlenecks and prevented them from delivering a reliable forecast frequently.
Conventional, manual planning processes are not only inadequate to deliver accurate results, but also fail to timely deliver the information. By the time businesses come to a conclusion based on the results, the scenarios have already changed.
Many businesses failed to get a timely grasp on the demand and supply momentum of their products as by the time their teams presented their forecasts, the situation on the ground was different. This resulted in confusion and mismanagement at all levels of the value chain including production, HR, and supply chain. Delay of information misled many business leaders and they took the wrong decisions.
This shows why the standard ERP, CRM, and other software packages aren’t up to the job. In order to maintain speed and accuracy, finance leaders require tools that feature multiple scenario planning options simultaneously. This will help the organisation to take the right decision in real time and cash in on any opportunity which arises spontaneously.
Availability of up-to-date and accurate information in this environment is of the utmost importance. Organisations have observed that their top management often seem divided on several business decisions as they lack a synchronized, holistic view of their future strategy. Sales and finance teams are often seen to have a disagreement on future forecast predictions as their observations were not harmonised. This questions the credibility of data from both ends and hence creates confusion and indecisiveness.
For an effective and credible forecast, departments need to collaborate and adopt a well-synchronised toolset which offers a single version of truth and has mutual consent from all stakeholders. This demands a planning software that can incorporate data from multiple sources and deliver an authentic output based on all the information it has gathered across the organisation.
One thing that this pandemic has taught businesses across the globe is agility. We cannot survive in this new business world if we are not able to flex and adapt fast. Where many organisations have faced some serious challenges, some of them have come out as a success story.
Service industries adapted digital methods to frequently communicate with their clients and manufacturers, and redesigned their facilities considering the new health and safety challenges for the workforce. Restaurants transformed their business by focusing more on effective and attractive delivery of food rather than continuing to invest in the dine-in experience. Several businesses transformed their supply chain to adjust according to the new needs and more demanding environment.
For this, rapid scenario forecasting was required and finance teams were tasked to come up with new and innovative ideas to deliver value in this new environment. Finance teams adapted their existing systems and opted for a more flexible tool that could analyse and forecast information with increased agility and speed.
Harnessing finance technology solutions to drive new ways of running businesses is now inevitable. The world has completely transformed since the start of the pandemic, and we cannot ignore the fact that innovation, rapidness and agility are the keys to future success. Financial intelligence is an integral aspect of empowering finance teams with the right tools and skills will determine the future of business globally.
If you’re facing challenges in adapting your financial planning to the ‘new normal’, Axiom can help. To find out more and have an introductory chat, why not call us on +44 (0)1932 548 465, or email us at firstname.lastname@example.org.