Facing ongoing economic uncertainty, savvy finance leaders are prioritizing digital transformation to help their organizations react fast to upheaval. Legacy planning solutions can’t come close to providing the support needed to adapt in the rapidly-evolving world around us. Rigid and siloed, yesterday’s finance, planning, and analysis (FP&A) tools lack the flexible foundation necessary to quickly and easily support change. And today, that’s a huge disadvantage.
“Whatever the future holds for the finance function—recession, supply chain disruptions, or management pivots—having the correct and latest financial information will be key to success,” said Host Chris Westfall in a recent episode of the Financial Executive Podcast, an audio digest focusing on the ideas and strategies of senior-level financial executives. “A large part of that battle to optimize financial information falls within an organization's digital transformation efforts.”
In a recent Workday-sponsored episode Westfall spoke with Gina Ferguson, Workday’s senior director of customer experience for finance, about digital transformation in a world of economical and social instability. Here are some highlights from their conversation.
“I feel the role of finance has definitely changed over the past few years, and especially given the pandemic,” said Ferguson. “One of the things from a transformation and a digital perspective is really looking at a lot more scenario planning and what-if planning, so not just looking backwards.”
Scenario planning prepares organizations for uncertainty by creating a playbook for potential business disruptions. When executed correctly, it’s a strategic approach to dealing with uncertainty and visualizing the future, so finance teams can help build agility and move the company forward.
A Real-Time View of the Business
In addition to scenario planning, Ferguson discussed the need for continuous planning, or rolling forecasts. Instead of being once-a-year exercises, rolling forecasts happen on a regular cadence. Unlike outdated, static planning, rolling forecasts enable agility with plans that are always current—keeping organizations a step ahead at all times.
“I think the concept of having this yearly plan is moving towards a rolling-type forecast outlook and making sure that you're understanding what the demand is, more near-term and long-term, but adjusting as you go,” explained Ferguson. “Just because the plan might have been set up (for 12 months out) doesn't mean that that is the most important part of your analysis anymore. Understanding what you're forecasting over the next quarter or the next two quarters is becoming just as important.”
Surviving in an Ever-Changing Environment
The world is changing faster than it ever has. Since there’s no way to dampen the pace of change, the only answer is to move with speed and agility as a business. As countless businesses have discovered, adopting a culture of modern planning helps unlock that agile future.
Interested in learning more? Listen to the podcast.