Ultimately, poor collaboration can have serious real-world business consequences. For example, a disconnect between planning and sourcing in the retail industry can result in retailers having too much or too little inventory, leading to expensive storage issues or customer-vexing stock shortages. The survey further revealed that when planning and sourcing aren’t on the same page, it can:
- Compromise the resilience of the organization’s supply chain (60%)
- Create a lack of confidence in budgeting and planning (56%)
- Increase the risk that spending will exceed the budget (53%)
The Path to Connection
Rather than rely on shared spreadsheets, emails, and ad hoc meetings, the two functions can integrate more seamlessly through a connected software solution that enables constant collaboration, bridges data gaps, and allows for real-time sharing of data and insights.
Breaking down data and communication silos is a must in order to align the planning and sourcing functions. Instead of creating fixed budgets that sourcing must simply follow, FP&A professionals can use collaborative technology to work in partnership with procurement to create a budget that supports business goals and accurately reflects ever-changing market conditions. With a shared platform, sourcing teams then can use the budget to identify the right suppliers at the right rates—driving cost savings.
Organizations that have integrated their planning and sourcing applications enjoy a host of benefits, the HBR Analytic Services report finds, such as minimized overspending (51%), more accurate forecasting of future spending (51%), and greater confidence in financial plans (41%). With more accurate forecasts, lower odds of going over budget, and more secure planning, these organizations are better attuned to nuances in customer demand. Which ultimately leads to better customer service.
Yet leading organizations—those that have highly collaborative planning and sourcing functions—make up only 32% of respondents. What sets these organizations apart? Compared to other organizations, leaders are more likely to adopt integrated planning and sourcing platforms and applications that enable collaboration and information-sharing. They’re also more likely to give finance early insight into upcoming spend, to use real-time pricing data to project costs during planning and budgeting, and to ensure predictable cash flow.
The HBR report offers multiple recommendations for promoting and implementing technology-enabled collaboration, including:
- Putting planning and sourcing together—literally. Configure the office floor so planners and buyers sit near each other. Make sure they attend each other’s meetings.
- Prioritizing visibility and usability when choosing a collaboration-enabling platform or app.
- Securing buy-in. Involve all impacted stakeholders throughout the change process—from making the decision on the tech platform to demonstrating its benefits.
- Auditing to ensure the new tools and processes are being used properly.
In the current climate, planning and sourcing teams are facing myriad risks from working in silos—but they could realize powerful rewards from greater cohesion and collaboration. “When sourcing and FP&A teams are empowered by collaborative technology, they can remain closely aligned to maintain business continuity and agility despite supply chain disruptions,” says Chris Wada, general manager, spend management at Workday, in the HBR report.
Workday’s solutions enable the collaboration that today’s sourcing and finance teams need. With Workday Adaptive Planning, finance can actively and effectively plan with its business partners in procurement and can quickly pivot from analysis to action. Workday Strategic Sourcing provides visibility throughout the entire source-to-pay process, so finance and procurement teams can proactively manage spend and control costs. By combining both solutions, organizations can achieve greater agility, alignment, and business performance.
To learn more, check out the Harvard Business Review Analytic Services report: “Optimizing the Supply Chain by Aligning the Planning and Sourcing Functions.”