It’s been said that speed is the ultimate advantage in business. This concept is particularly relevant today: The pace of business is even faster now as companies plan for life after COVID-19. What's trending today becomes tomorrow’s disruption—and tomorrow’s disruption will eventually define a new way of working.
The question is, when disruption arrives (and it will), when and how do you initiate your transformation? And what happens if you don't move fast enough?
Plenty of companies are scrambling to answer those questions. Yet most are coming to the difficult realization that a chasm exists between the pace of change and their ability to keep up with it. Workday defines this as the acceleration gap. It was already emerging prior to the pandemic, but the past year-plus tested every organization’s ability to respond.
Indeed, the C-suite reports the acceleration gap is real:
63% say their processes and execution are too slow.
80% say it takes too long to make decisions.
74% say they’re not ready for what’s next. They know reskilling is urgent, but only 10% are ready to act on it.
75% say they’re stuck in operational silos that greatly hinder their speed.
67% say they’re losing ground. They believe they will become irrelevant if they don’t adapt.
Sticking with a legacy system will likely broaden the acceleration gap rather than bridge it.
The good news is many of our customers have already bridged the acceleration gap. One of the critical shifts they made was moving from:
Finance and financial-centric planning to company-wide planning.
Annual planning to continuous planning, with plans that are always current.
Point-in-time strategy that quickly became obsolete in the face of change to continuous recalibration where adjustments are made rapidly.
To maintain speed, these businesses are adopting a continuous planning process enabled through rolling forecasts and what-if scenarios. They’re also creating multiple what-if scenarios for not only operational planning but workforce, sales, and demand planning on our flexible modeling platform.
There is, however, a need to go beyond continuous planning to an agile process that allows companies to dynamically create plans, execute on that plan, analyze the results, and then replan as conditions change. By continuously recalibrating, you can drive continuous improvement in a virtuous cycle:
Understanding how you are performing and taking action (analyze).
Connecting this analysis to inform your plans (plan).
And collaborating and carrying out the plans (execute).
Forward-thinking CFOs are already on board with continuous recalibration. For a majority of financial leaders, expanding their ability to continuously recalibrate their planning and reporting processes is a key part of their mission to improve their business agility. Even before the pandemic, companies began exploring continuous versus annual planning, with the aim of being more nimble than annual plans could ever allow. That’s because a continuous planning process provides finance teams with both the insight and the ability they need to respond quickly and effectively to real-world market and operating conditions as they shift.
To continuously recalibrate, however, you must have a single source of truth—what Workday calls the intelligent data core—with high-quality, detailed, accurate, and timely data. Acquiring this intelligent data core means you will no longer be burdened with a legacy enterprise resource planning (ERP) system. That's because the old-world ERP model is backward-looking, focusing on analyzing what happened long after the fact. It relies on siloed, outdated data and calcified processes that don't reflect an organization's current needs. And too often, companies make the mistake of porting their old ERP system to the cloud, which doesn't deliver any of the benefits of a true, cloud-native system. Sticking with a legacy system will likely broaden the acceleration gap rather than bridge it.
Even organizations that use a modern, cloud-based planning solution to forecast, budget, and model what-if scenarios can have the full potential and return on investment of their planning investments blunted by largely manual and inflexible legacy ERP systems. A lack of dimensionality—of the context and granularity surrounding the data—results in a lack of insight. And latent access to data can hamstring efforts to establish an environment of continuous planning and recalibration.
This is where a modern, unified, enterprise cloud environment enters the picture. The Workday enterprise management cloud, for instance, brings finance, spend management, HR, planning, and analytics together, all in a single system. And it’s the backbone of digital acceleration for high-metabolic organizations—those businesses that recognize that they must run at a new speed.
With this modern enterprise management cloud, your teams can continuously recalibrate as changes arise, with a single system on which to plan, execute, and analyze every aspect of your business. Continuous planning allows you to anticipate multiple scenarios as rapid change happens. Those plans turn straight into action, aligning people and resources to drive the best outcomes. And machine-learning-fueled analytics spot when you need to course-correct and what to plan for next, so you stay ahead of the accelerating pace of change.
When disruption arrives (and it will), when and how do you initiate your transformation?
Some of our customers who have made the shift are already seeing big results. For instance, healthcare provider ChristianaCare switched from annual to continuous planning in less than a week, even as the business was busy dealing with the fallout of COVID-19 on its operations.
“Our team was able to pivot quickly despite the many unknowns at the start of the pandemic,” recalls Kevin Kain, director of financial planning and operational analysis at ChristianaCare. “Our team had to be innovative, rapidly make decisions, and then ultimately understand the financial implications of those decisions. We quickly shifted our attention from an annual budgeting process to a monthly forecast at the local cost center location level. We also had to track all of our COVID-19 related expenses and all of our options for mitigation. We made the shift in four days.”
The lesson learned? The businesses that focus on transformation strategies to close the acceleration gap are poised to lead their markets in growth. Those who can’t end up wondering how the competition did it.