Everybody Plans: A Conversation with Tom Bogan

When Adaptive Insights became a Workday company in August, we brought together two amazing cultures. We also gained an incredible leader, Tom Bogan, who will remain as CEO of Adaptive Insights.

We spoke to Bogan about his thoughts on the key tenets of successful business planning, innovations on the horizon for business planning software, and the shared vision of Workday and Adaptive Insights.

Today’s successful enterprises recognize that companywide, integrated planning is a strategic advantage. It allows organizations to make better decisions, faster. An organization can have a great strategy, but without a plan, it doesn’t know how to execute that strategy. Conversely, a company can excel at execution, but lack a plan that articulates a strategy and goals.

Planning is the glue that holds strategy and execution together, and all parts of the organization need to do it. The good news is that with so much internal data now, companies have the information they need to support the planning process.

As businesses, we rely on increased sophistication in planning throughout the organization, from sales to marketing to workforce planning. Take a discipline like sales: In the past, we tried to estimate revenue increases based on statistics like the number of units and average price. We would come up with a very high-level estimate.

Today, we have sophisticated planning systems that factor in data such as the number of sales reps, the productivity of our reps, the target number of marketing leads for maximum sales rep productivity, and so on. These deep metrics help us plan around key business drivers and develop a closed-loop process: We examine our actual results, track them, compare them to the assumptions in the plan, and then seamlessly update the plan.

The first tenet is that planning should be done by people who own the various parts of the business. Ten years ago the finance team would have developed the plan, incorporating operating assumptions into it. But the plan wasn’t owned by the operating execs responsible for execution.

Planning is so fundamental that it’s not limited to the executive leadership team or even to finance. It’s essential to every type of organization, from small and medium-sized businesses to nonprofits and the largest enterprises. And every function within those organizations plans as well.

Our belief is that people closest to the business should own the plan. That means every part of the organization, such as sales, marketing, and operations owns the plan for their own function. Then the finance team, because it’s responsible for the aggregation of the profit and loss statement, the balance sheet, and the cash flow, should bring the various elements together. Putting the planning system into the cloud helps coordinate all this across the various parts of the organization.

The second tenet is that planning should be done on a continuous basis. Thirty years ago we created budgets annually, with a light forecast update quarterly. Today, because of the systems that we have and the information that’s available, we can update plans and forecasts on a continuous, rolling basis, which is really what people should be doing.

The correlation among planning and company initiatives and strategy is much stronger today that it has been historically, and we can track key strategic elements to determine if we’re making progress against them. We can also see a view of various strategic alternatives and their impact over a multiyear period.

The third core tenet is that the best practice for businesses is to build comprehensive plans. Organizations can’t rely solely on an expense plan; they need a rich revenue plan, a balance sheet, cash flow plans, and operating metrics all linked together.

There are two advantages for business leaders. One is we gain more complete and comprehensive plans. The other is that we can move faster. When we plan on a continuous basis, it’s much easier to update assumptions in the plan. The process and the cycle can be a lot faster, allowing us to be more agile.

Take the software business as an example—especially in the early stages of a company’s existence, it’s dealing with constant change. It has to be prepared to constantly update plans to reflect that dynamic. As part of that agility, businesses also want the capacity to assess and evaluate alternative strategic scenarios. They want to say, “Hey, if I do this, what does my profit and loss look like in the short term versus the long term, and what’s my payback?”

The planning space is on the cusp of major transformation. The last time we saw this type of shift was with the introduction of spreadsheets, which automated business planning.

Now we’re seeing a fundamental shift in the planning process—from the impact of the cloud, machine learning, and artificial intelligence to the ability to automate planning, benchmarking, and decisioning processes. Ten years from now I’m convinced that we’ll remove the remaining manual, tedious work that’s part of business planning today.

In that timeframe, I also believe we’ll have the artificial intelligence to assess plans and their associated risks. For example, when my plan is created and my team has reviewed it, we should be able to run it through a risk meter and say, “Hey, is this a 75 percent probability plan or a 25 percent probability plan?” And we’ll get a prediction and an explanation.

The final piece is potentially being able to generate workflows from the planning system. A headcount requisition, for example, might be dependent on spending triggers. The spending is in the plan, but the organization isn’t going to commit to the spending until reaching a certain trigger or threshold. In the future, that might be automated as well.

Our vision for Adaptive Insights was to create the leader in the planning space, help our customers succeed, and build a highly engaged, world-class team. Being a part of Workday accelerates those goals for us in every dimension.

Both Adaptive Insights and Workday value their people and customers first. And because we’re so aligned around that, it gives me great confidence that the combination is accretive for both organizations. We’ll continue to invest and deliver world-class products, but we will also continue to offer great experiences for our customers and our teams.