Inside the push for continuous planning - finance transformation lessons from Planful customers

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For almost ten years, the diginomica team has pressed into transformation stories, in a valiant attempt to separate the customer gold from the vendor hype. Two big lessons:

• As a buzzword, "transformation" is as loaded as they come. Transformations have a way of falling short of the mark – and the org chart changes fast when tech projects under-deliver. 
• If the so-called "transformation" at hand is just an internal reorg, then it's navel-gazing at best. A successful transformation comes down to serving our constituent groups better, starting with customers. There's no one way to do this, but savvier use of data is the obvious/persistent theme.

But turning better data into better decisions is no small feat. Before I bailed on diginomica to goof off for a week, I decided to revisit a series of FPM (Financial Performance Management) projects, via our Planful customer use cases. I pulled out the best lessons – and crucial project moments. 

From siloed data to continuous planning – an ambitious goal

In most "transformations" worthy of the name, there is some kind of "continuous" goal as a vision, a bar to measure against. Continuous means we are no longer static, piling up stats for annuals, and accessing siloed data. "Continuous" means we are making course corrections all along the way, before small problems become crises – and before unhappy customers become former customers. 

Granted, "continuous" can be idealistic. For example, the continuous close is a long way off for most finance teams. But for starters, why not push for a shorter - and more automated - closing cycle?

Finance leaders also think about "continuous planning," not as something that's immediately achievable, but as a bar that captures our imagination – and corporate resolve. Such a goal also brings into bold relief all the obstacles in our path. An incomplete challenge list:

• Siloed data, and the general problem of data cleansing and accuracy.
• "Dark data" that's not in our FPM tool, or planning process. This data hurts our planning accuracy by its absence. 
• Overworked finance teams, too preoccupied with admin to hash out planning scenarios. 
• Spreadsheet hell – another place where dark data may live, and hinder our goal for a single source of finance planning truth. 
• Poor collaboration between finance and the constituents groups finance purports to serve.
• The inevitable distractions of mergers, acquisitions, and leadership team shuffles - and the pressure such changes put on our FPM systems (we find out pretty darn quickly how agile those systems are when our budgets must be redone "ASAP" due to M/A). 
• Staff turnover, talent shortages, skills gaps, and resistance to new tools and approaches. 

Pretty dashboards don’t guarantee better decisions

That's hardly a complete list, but I'll stop before our hairs turn gray. Because the reality is that finance teams with resolve - and a determination to modernize - have shown they can change. They can provide their organizations with guidance in a turbulent economy. However, I want to add one more that is often overlooked: the dashboard debate.

Just because we have a pretty dashboard, doesn't mean we are making better decisions.  

No matter how clean and current the data is.

Dashboards have their place (and their advocates), but when it come to better decisions, pretty charts are hardly a panacea. Nor are they an end state. If we keep our "continuous FPM" goals firmly in mind, we should now look at all kinds of decision support, from automating routine workflows to scenario planning, from role-based alerts to AI-powered predictions.

With this in mind, what can we learn from the prior Planful case studies? Here's my top six transformation lessons for finance teams, with links to each story. The selected quotes come directly from finance team leaders.

If cost-cutting must happen, you need precision

We also have to look at how much we have to cut our production, so we don't tie up too much cash into our inventory. It's basically worst-case scenario tests, like stress tests for our company. We found where our limit is, and based on the worst-case scenario sales figures, this is where we need to cut costs. This is where we need to control spending. This is where we can postpone CAPEX, and this is how we want to navigate through this storm, and come out with a better financial situation than before. (How Steinway & Sons changed financial planning to keep pace with the pandemic economy - a Planful use case)

AI and machine learning can’t cover up for data integrity problems

It's all about the data though. We can talk about using AI and machine learning and all that. But what I found is the only way this works is if you've got clean data that's feeding into the systems of record.(Planful Virtual Tour 2020 - Bose reveals lessons learned on the way to continuous planning)

AI can be an asset for finance teams in several proven ways, including anomaly detection

Right now, our accounting team has been running trial balances and trying to look at company variances, and identify where there's anomalies. I think we have 100 different entities that all have full financial statements in Planful. It's becoming too much for them to actually analyze in any meaningful way. (Planful Perform 2022 - how ProMach powers its acquisition strategy with cloud finance)

Being relevant to business units isn't just about data - it's about collaboration

We want to make sure that there's operational accountability, there's a connectedness across the business to the planning process. Again, this is not just something finance does, but something that becomes core to our day-to-day processes. There needs to be transparency. So where is the single location - the single source of truth as well - where all the key business stakeholders can go to, and make sure that we're all playing off the same sheet of music. (Bose reveals lessons learned on the way to continuous planning).

Move beyond reports and budgets – become trusted advisors to the business units you serve

The FPM platform has helped transform our finance organization into a trusted team of advisors for our executives and senior management team. Additionally, it has enabled us to provide information in a timely manner that is necessary to make critical business decisions that put us in the best position to succeed both on and off the field. (Planful Virtual Tour 2020 - how the Boston Red Sox finance team uses modern planning tools to rethink a disrupted market)

Continuous planning isn't a pipe dream, it's a process of change

Continuous planning can seem like an elusive goal indeed. But when you view it as a vision that fuels ambition and guides change, the proper next steps emerge:

In the upcoming future…we will eventually be able to do rolling forecasts. That was something that in my FP&A career was always a dream. We have 1,400 different department location combinations now created in planful with all the same KPI-driven analysis, that generates a full P&L. (Perform 2021 - Imperial Dade sets its sights on continuous planning with Planful)

My take

As the economy faces another tough stretch, finance teams will be expected to do more with less. For some organizations, keeping the lights on (e.g. cost cutting) may push the transformation agenda off center stage. But standout companies find a way to fuse the two - and not only persist, but come out sharper. 

In times like these, the high bar of "continuous planning" may seem almost impossible. But as these FPM field tips show, there is plenty within reach. Small wins have a way of stacking up. Many of these examples come from COVID times, hardly an easy stretch for finance teams. It was, however, a chance to show how on-your-game your team can be. We have another such opportunity now.