By Michael Gould
What do market conditions, customer preferences, business objectives, political realities and technology trends have in common? They’re all subject to rapid change, and they can all have a profound effect on business operations. That’s why it’s so important for companies to adopt planning practices that enable them to respond quickly to change.
Technology makes it simple to streamline operations and eliminate barriers between data repositories, which in turn makes rolling with changes easier. More modern approaches to budgeting and other core processes are also helpful in increasing organizational responsiveness. Here are five ways your company can become more agile through better business planning in 2017:
- Embrace concepts that increase agility, such as zero-based budgeting. Rather than assuming last year’s actuals as a baseline and making adjustments, more companies are embracing zero-based budgeting, which supports agility by providing the detailed insight needed to achieve a material change in the cost base. Even traditional enterprises have adopted business planning software that facilitates zero-based budgeting, building a budget from the ground up every year. Since it’s future-focused, this approach helps companies react to changes more quickly.
- Capture and use data quickly to seize opportunities, make course corrections and improve decision-making. Business challenges like rapid change (in employees, market share, global footprint, etc.) require a quick response. And that takes the ability to capture and apply data quickly. Companies need current information to gauge progress toward goals, make course corrections when needed and mitigate risks. And business units must be on the same page, with access to the same information, to improve data quality, facilitate connected planning and make better business decisions.
- Use advanced technology to address planning challenges. Many companies still use enterprise resource planning systems that were originally designed in the 1980s and 1990s. Others use homemade Excel spreadsheets and Access database solutions for planning. These approaches are problematic because the information is siloed. Cloud-based, automated, connected planning solutions allow data to flow across departments, allowing users to leverage more data in a variety of formats for detailed, nuanced modeling scenarios that facilitate better business decision-making.
- Prepare to integrate data from IoT, bots and automated tools into business operations. Over the past several years, data has proliferated from a variety of sources, including the Internet of Things and sensor data. Businesses that capture and harness data from these sources will gain valuable insight into marketplace trends, buying patterns and customer expectations. Companies that use a planning platform that can leverage data from multiple sources will have a distinct competitive advantage in the years ahead, as data sources expand.
- Identify information flow bottlenecks and obstacles that hamper agility. Executives in every department should evaluate data flow and identify better ways to manage data. It’s a good idea to consolidate systems because using multiple platforms within a single organization makes streamlining processes a challenge. Companies that can reduce the number of systems they use will gain agility. For example, one global tech company cut the number of systems they used from 7,500 to 750, which made onboarding new clients and interdepartmental information sharing much simpler.
Technology advances are accelerating the pace of business change and will continue to do so as AI gains traction. Other potential curveballs await enterprises in the coming years, including political developments that may affect currency, regulations and global expansion plans in unpredictable ways. That’s why it’s imperative for businesses to have the tools in place to respond rapidly, including the capacity to model various scenarios and create detailed yet flexible business plans well in advance.
Planning is the key to weathering an uncertain business climate. The companies that embrace agility, use data and advanced technology to their advantage and ensure the free flow of information across business units will be better equipped to correct course and seize opportunities in the remainder of 2017 and beyond.
Michael Gould is one of the world’s foremost EPM experts, with more than 25 years in design and architecture. In 2006, Michael set out to design and create a new solution from the ground up that leveraged technology innovation. This vision became the Anaplan cloud platform for business users—enabling them to design, build, maintain, and manage their own applications—without any IT support. Prior to Anaplan, Michael was the lead architect in the design of the analyst modeling tool, which became the leading multi-dimensional modeling tool of the 1990s until acquired by Cognos. Michael holds Mathematics degree and a MSc in Computation from Oxford University.