This week we are pleased to welcome one of our valued Jedox Partners in the USA as a guest to the Jedox Blog. Headquartered in North Carolina, FutureView Systems shares their unique insight on the benefits of integrated continuous planning.
Budgeting is an extraordinarily powerful tool to keep your business on track. Yet in recent surveys, the majority of smaller businesses (over 61%) didn’t create a budget. Too often, fast-growing businesses view budgeting as a herculean effort. But budgeting is a basic strategic exercise that creates significant, measurable value for your entire business.
Effective budgeting requires a process ingrained in the normal monthly review process that occurs at an organization. If your budget planning only happens once a year, you spend too much time figuring out how to do your planning rather than focusing on strategic decisions.
Integrated continuous planning supports this in several ways:
- Lessens the “growing pains” that come with planning and forecasting in a fast-growing business. If the idea of doing an annual budget seems scary, let alone re-forecasting monthly, then you haven’t been working with the right tools or embracing the right strategy.
- Frees up more time to focus on “big picture” priorities. The less time you spend each year doing annual budgeting, the more time you’ll have to think about the big picture. Spend more time working on your business and less time working IN it.
But why else should your business consider using integrated continuous planning? Let’s explore.
What is Continuous Planning?
Continuous planning creates a regular touch point with budget owners to assess performance and update business plans, always comparing back to the official plan for the year. In other words, it increases the frequency with which you plan.
U.S. President Dwight D. Eisenhower once suggested that while plans may be useless, planning is indispensable. Continuous planning is a process that makes planning more efficient, which provides the benefits of timely projections and increases your ability to adapt and react as a fast-growing business. This is a crucial capability for long term success.
Not sure what it will look like? Here’s what continuous planning will do:
- Assess a financial position at the end of every month. Do you struggle to understand how or why your performance differs from your expectations? Having a continuous planning process in place will ensure that you have a touch point to assess the financial performance of your company with newer, fresher, and more accurate information.
- Reforecasting for the remainder of the year. Ever wonder why your yearly forecasts seem so far off by the end of the year? If you didn’t have continuous planning in place, it’s likely because you didn’t know how the things that were happening throughout the year were expected to impact your financials. Regular touch points help reduce this confusion.
- Engaging budget owners for a truly distributed process. Budgets are often a “top-down” methodology. They’re all about what leadership thinks, not about team members on the ground. Engaging budget owners with continuous planning encourages people to have more “buy-in” with goals and supports increased accountability.
How Does Continuous Planning Help Companies?
It’s not difficult to imagine how continuous planning can streamline your planning process and offer improvements in your financial forecasting. But what about your company? What are some of the tangible benefits you can start noticing right away?
- Faster reaction times. With more accurate data at your fingertips, you’ll be able to react more quickly to potential issues. Are you running short on resources in one area? Do you have a segment that is running under budget that can now be reinvested into other areas of the business?
- Smaller tweaks. By relying on a process that only requires incremental changes regularly, finance teams are not consistently burdened with a large re-forecasting process. Instead, they only need to make small tweaks here and there. The result? The business can focus on strategic initiatives while still providing a forward-looking visibility to the executive team.
- More meaningful conversations. Executives at your business can have more meaningful conversations with the management team when there is data in place to back up assumptions. Rather than making decisions based on hunches or guesses, you can open dialogue with management that addresses specific issues you’ve seen in the most recent plans.
Continuous planning can provide your business with powerful change. But what about implementing continuous planning? Is it something that requires a major upfront investment of time and resources? Is implementation easy to do?
How To Make Continuous Planning Natural
A modern solution to integrated continuous planning offers a straightforward path to enhancing your organization’s decision making and ultimately, flexibility. Continuous planning is not just a way to improve your business. It’s a new way to run your business. With the right tools in place and a keen eye on improving your flexibility, you can have a more accurate, more agile business that’s ready to take on the challenges and uncertainty in the current economic climate.
Register for their webinar co-hosted with Jedox on June 10, 2020 at 1:45pm ET to learn more about continuous planning.