In volatile business environments, annual plans are very quickly overtaken by reality. Traditional financial planning is thus increasingly losing its relevance. High levels of flexibility and real-time reactions are required. However, organizations won’t be able to fully embrace the benefits of flexible, real-time planning without properly adapting to flexible new technology solutions designed to improve planning and enterprise performance management.

Traditional financial planning is no longer sufficient on its own. It is too rigid, too time-consuming and too one-sided. Instead of controlling and updating budgets, the identification of value and cost drivers and the stronger intertwinement of financial planning and operational planning are required for long term success. However, the changed, driver-based approach requires not only close collaboration between the finance department and the specialist departments, but also clean and correctly linked data and a tool suitable for management that can be used without programming knowledge.

Companies invest a lot of time and resources in their business planning. The preparation of annual budgets is very time consuming. In many cases, they’re spending far more time than really necessary than if they were using modern tools. The planning process is often unstructured and therefore prone to errors. Especially when solely based on Excel since the handling of Excel tables easily gets cumbersome. The separate worlds of sales and finance usually must be manually merged from many different data sources. Planning directly in ERP systems quickly gets uncomfortable and functionally limited. Forecasts are unreliable and quickly become outdated due to rapid changes and complexity of markets.

Using new technologies and tools

To succeed in the age of Digital Transformation, companies must be able to make fast, data-based decisions. In short, agility is key. One of the most important challenges of planning in a volatile environment with rapid changes is to make better use of, understand and evaluate existing data. For this, modern planning software together with artificial intelligence-based (AI-based) predictive analytics can provide important support by evaluating historical data to derive forecasts for further development. Planning becomes much more efficient.

Modern planning solutions support the planning process with models for the individual items of the income statement (P&L) for sales and cost planning and provide tools for efficient collaboration. The specific requirements existing for individual industries are considered by the solution. Ideally, the tools of the planning software can be modeled flexibly to perfectly meet company-specific and driver-based planning needs. Markets can thus be re-segmented, market shares gained, EBIT improved, or focal points shifted.

Include everyone in the change process

An incremental and inclusive change management process is recommended for implementing a new planning approach. It’s vital to success to have buy-in from key stakeholders, departments, and employees. After all, increased collaboration between the finance department and the rest of the organization is just as essential as acceptance of the new planning approach. Finance acts as an internal consultant within the company and helps the various departments to collaborate in the planning process. The departments provide their specialist expertise for the selection of further KPIs and for the identification of value drivers.

Long term improvements with a modern solution

Change is never easy. When organizations commit to long term improvements to their planning and reporting with the latest tools of technology, it enables a greater focus on strategy. It affords the ability to be proactive instead of reacting to changes in the market and finding new ways to optimize value creation in the business. With our eBook, you can start planning your Tech Refresh.

The blog post is a translated excerpt from an article that first appeared in German Controlling & Management Review1.


1 Originally published in German as Gegenmantel, R. (2020): Planung verändern mit neuer Technologie, in:  Controlling & Management Review 64 (3), p. 40-45 at,