What do you often do when you are faced with obstacles in life? You have a few options: Learn to live with the challenges, simply ignore them until they somehow go away, Fake it till you make it, or find a way to address them (no matter how long it takes). There are many ways to deal with the cumbersomeness of life, so don’t face a challenge and let it overpower you.
Similarly, when you have an organisation, and things are going well with how you do things, you notice that a new challenge arises as the business world becomes rapidly progressive and modernised. Talking about getting on your nerves, yeah?
The Financial Planning Process is Complex
Planning processes involving these two can be challenging and complex for several reasons. Imagine being the leader of a financial team. How does one deal with complexity? When something gets too complicated, the whole process turns you into a block of melting ice.
Multiple Stakeholders and Data Sources
Have you ever tried to plan a trip with a group of friends with different interests and views? The process of planning a simple trip can be so overwhelming when it involves different types of people.
Finance is a company’s backbone. Hence, financial planning typically involves various stakeholders, including finance professionals and teams like sales and operations—all with different views. Collecting and integrating data from these diverse sources can be challenging, leading to complexity in the planning process.
Poor Alignment Between Business and Finance
When business and finance functions are not well-aligned, it can hinder the accuracy and effectiveness of financial planning. This misalignment can arise from differences in goals, strategies, or communication between departments.
Manual Processes and Legacy Systems
Excel is the OG, as Gen Z likes to describe it. It is an approach that has been well-received in the past and is still practised by most companies. For a small-medium company, using Excel to manually collect data for financial planning is still considered doable.
When a company grows in size and number of people, doing things manually somehow leads to more problems than good. Manual data collection and using outdated systems can lead to inefficiencies, errors, and complexity in financial planning. These systems often lack the flexibility and automation needed to handle the dynamic nature of financial data.
Ensuring the accuracy and reliability of data is crucial for financial planning. However, data inaccuracies, inconsistencies, and incomplete information can significantly complicate the planning process.
Coordination and Communication
Effective financial planning requires seamless communication and coordination among various stakeholders. Communication breakdowns can lead to misunderstandings, delays, and complexity in the planning process.
Scenario Planning and Risk Management
Financial planning involves scenario planning and risk management to anticipate and mitigate potential challenges. Developing and managing these scenarios can be complex, especially when dealing with multiple variables and uncertainties.
Ongoing Monitoring and Updates
Financial planning is an ongoing process that requires continuous monitoring and updates. This ongoing nature can lead to complexity, as it involves regularly reassessing and adjusting plans to reflect changing circumstances.
What are the common challenges?
Data Inaccuracies
Even making the most straightforward decision takes days and nights. You listed every pros and cons, but you could not come to one absolute decision that would leave nothing but satisfaction.
Making an informed decision that puts your company at stake is even more challenging. Hence, accurate and reliable data is crucial for creating trustworthy forecasts and making informed decisions. Inaccurate data can lead to flawed forecasts, missed opportunities, and increased risk due to human errors, inconsistencies in data sources, and changes in data definitions.
Legacy Systems
The “legacy” here doesn’t mean leaving your legacy behind.
Legacy systems mean using an outdated system when you are supposed to elevate financial planning’s approach to align with your business goals.
A legacy financial planning and analysis (FP&A) system can be inflexible, lack proper security protocols, and require significant resources to maintain and support. This may pose a financial burden and impede FP&A operations.
Lack of Insights and Limited Transparency
The ability to make data-driven decisions, navigate uncertainties, and provide strategic guidance relies on having access to accurate, relevant, and up-to-date business insights. A lack of actionable insights can limit decision-making, strategic planning, forecasting, and other key finance imperatives.
Budgeting processes can go awry when built on data of questionable accuracy and with limited transparency into spending trends. This can lead to overspending, inefficient resource allocation, and difficulties predicting future financial needs.
How Adaptive Planning Addresses It?
These factors contribute to the complexity of operational and financial planning processes, highlighting the need for robust strategies, efficient processes, and effective communication to manage these complexities effectively.
Data Integration and Automation
Adaptive seamlessly integrates with your organisation’s ERP system, which stores your actual financial data. Adaptive can automatically integrate data and regularly retrieve actuals from the ERP system. This removes the necessity for manual data input or file transfers, guaranteeing your planning models stay in sync with current financial information.
A Single Source of Truth
With Adaptive, it’s possible to establish and manage a unified planning model. This allows all users to access and edit the identical plan version, removing the difficulties of handling numerous spreadsheet or workbook versions.
Having a single source of truth can avoid discrepancies, version control issues, and the laborious task of consolidating data from various sources.
Defined Roles and User Access Control
Adaptive provides comprehensive user access and permissions functionality. You have the capability to establish roles and allocate specific access privileges to users according to their responsibilities. This ensures that users can only view and modify the data and functionality relevant to their roles.
Through the implementation of detailed user access controls, Adaptive improves data security, lessens the risk of unauthorised data modification, and ensures the protection of sensitive information.
Cloud-based Software to Access Anywhere
As a cloud-based solution, Adaptive allows users to access the application from any location with an internet connection. Whether users are working from the office, at home, or while travelling, they can securely log in to Adaptive through their web browsers.
This flexibility in accessibility ensures that teams can collaborate effectively, no matter where they are located. It supports remote work, distributed teams, and global collaboration, ultimately boosting productivity and responsiveness.
Streamlined Planning Process
Adaptive provides powerful automation features that make planning processes more efficient and uncomplicated. Tasks that used to be manual and time-consuming, such as consolidating data, allocation, and complex calculations, can be automated within Adaptive.
By defining formulas, rules, and calculations, you can automate repetitive tasks, considerably cutting down on manual effort and reducing the likelihood of errors. Automation conserves time, enhances accuracy, and lets users concentrate on more valuable analysis and decision-making.
Multidimensional Planning
Adaptive’s primary advantage lies in its capacity to manage multidimensional planning effectively. It offers the versatility to plan, analyse, and report across various dimensions such as business units, departments and beyond.
This multidimensionality enables a granular understanding of the organisation’s performance, enabling more profound insights, improved scenario analysis, and better-informed decision-making. Users can segment and analyse data using various aspects, offering a thorough perspective of the company.
Advanced Modelling Capabilities
Adaptive’s advanced modelling capabilities remove the necessity for repetitive manual calculations. The application enables you to establish formulas, rules, and calculations tailored to your specific planning needs.
Once configured, these calculations are automatically applied to the relevant data points. This automation ensures consistency, accuracy, and efficiency, mainly when dealing with tasks like workforce planning by position, where multiple calculations are required.
Workday Adaptive Planning Empowers Financial Planning Processes
Workday Adaptive Planning allows organisations to tackle common planning challenges effectively, streamline their processes, foster collaboration, ensure data accuracy, and drive better decision-making using real-time insights.
