Ten key Trends in Budgeting, Planning and Forecasting. (part 2)

 

As outlined in part 1 of this 2 part blog, budgeting, planning, and forecasting processes need to change to keep up with your competitors and industry, particularly in challenging and uncertain times like we are currently experiencing. Successful companies are addressing this and implementing modern, agile, and flexible processes to facilitate ever-changing business conditions. Scenario planning and what-if analysis is critical and aging Excel based processes just do not cut it anymore.

Modern Budgeting, Forecasting and Reporting Platforms that allow finance teams to model and analyse performance are needed to make a business resilient and future-proof.

Below we continue our look at the 10 key trends in this area, now focusing on numbers 6-10.

6. Decision-making at the speed of global change

To ride out the current market turbulence and prepare for the post-pandemic future, organizations need to reshape their planning and forecasting capability with the help of innovative technologies that enable more effective use of data for planning and analysis. In a global situation marked by uncertainty and super-fast changes, the key feature is speed: business-as-usual approaches need to be reinvented to shorten decision-making time, across the entire supply chain and all organizational departments

7. AI and Machine learning

The more computation capabilities of machines increase, and Artificial Intelligence evolves, the more the interaction between people and technological solutions becomes natural and immediate.

On the one hand, machine learning helps decision-makers to minimize the substantial amount of bias that is usually introduced into the forecasting processes by gut feelings or innate preferences. On the other hand, AI solutions revolutionize the way in which any business user engages with systems, making analysis and reporting more like a human interaction and requiring less customization.

Although the application of AI and machine learning within planning, budgeting, and forecasting is still relatively news, organizations in almost every industry are increasingly aware of the benefits they deliver.

However, to make AI and machine learning effective, leading companies are addressing their efforts to achieve a consistent and complete view of the entire organization.

Through an innovative algorithmic engine, specifically designed for business, modern tools allow end users to quickly produce comprehensive forecasts, create clusters, and benefit from the most advanced statistical techniques, without relying on a data scientist.

The result is that decision-makers and top executives are empowered with data-driven outcomes, simulation, and predictive modelling, rather than indiscriminately replacing their business intuitions.

8. Create a single point of access for enterprise data.

Data is the lifeblood of the modern enterprise, and continuous monitoring and analysis of performance, with real time feedback into plans, is key to creating and maintaining accuracy throughout the Budgeting Planning &Forecasting process.

Many organizations are sat on a goldmine of data generated by numerous systems and processes but fail to release its potential because of the disparate way in which it is stored. A plethora of spreadsheets and data exports are error-prone, time-consuming, and ineffective in providing interdepartmental insights.

To drive better decision-making, it is vital for companies to create a single point of access for all data that delivers a 360° view of the organization. This complete transparency paves the way for a best practice Integrated Business Planning (IBP) approach, which removes silos in the planning process, increases alignment and accountability, improves visibility, and leads to better decision-making.

A unified Decision-Making Platform can connect to and integrate any kind of data from disparate sources to provide this single source of truth, removing the need for Excel plastering or data normalization which normally occurs when using different point solutions. In turn, this improves the ease, effectiveness, and timeliness of decisions.

9. Intelligence for everyone

Senior executives and top managers are making self-service analysis and reporting a priority, in particular within planning, budgeting, and forecasting.

This approach becomes a self-fulfilling prophecy which drives better performance. As McKinsey (2020) points out, “As employees become more accustomed to using self-service analytics tools, they become more comfortable digging into the data to test hypotheses. In time, they begin to trust the data more, and they become more data-driven.”

Self-service analytics and reporting, natural language search, and other cognitive technologies are expected to transform the way business users interact with systems, making it much more like human communication and requiring less customization.

10. Moving planning into the Cloud

Like most types of enterprise software, the world of analytics and planning is moving into the Cloud faster than smoke in an updraft. The list of advantages is irresistible to businesses of all sizes. Economies of scale, savings, scalability, elasticity, faster time to value, and access to a world of data and collaboration are but a few.

To ensure the successful delivery of a Cloud solution, organizations need to evaluate whether the technology fits with their business rather than the other way around. They should look for a solution that delivers:

  • Cost-effective scalability
  • Cloud-to-cloud or cloud-to-on-premise data integration and consolidation
  • Self-service implementation and management of applications
  • Collaborative access to information without geographic, language, or technical boundaries
  • Best-in-class security and compliance certifications

 

April 2021


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