Let’s recap some of what we have learned. First, planning departments face huge challenges driven by an increasingly complex and unpredictable world. Uncertainty reigns supreme, yet the need for effective planning has never been higher. This is one of many paradoxes being faced. Another is the need for planning efficiency while at the same time a need to embed planning in the lines of business to be as close to frontline action as possible. Fortunately, new technologies are supplying some solutions to these challenges.
Cloud computing has exploded in ways too numerous to count. Cloud computing helps planning professionals create capacity to add strategic value. Using the cloud can (1) speed implementation, providing quicker payback, (2) lower upfront costs, (3) increase flexibility with ability to add additional users/capacity as required, (4) ensure you’re on the latest release without your resources needing to be involved, and (5) reduce upfront capital costs. Ventana Research notes that 53% of organizations are either currently supporting or plan to support the finance team’s use of cloud computing within the next 24 months. Using the cloud gives planners quick, cost-effective options in planning more effectively.
If options are what planners need, then Big Data is providing a flood of opportunities. Data volumes, data velocity and data variety are all increasing exponentially as the world moves to the next revolution of the digital era. This directly impacts planning cycles as planning involves accessing data (often large volumes of data from a variety of sources on a recurring basis). This basic data is run through various allocations, algorithms and complex calculations to convert it into more useful insights. The ability to examine multiple possible futures is what gives planning its power to transform businesses. That is the chief reason why many consider planning to be a “killer application” for in-memory computer platforms.
Planning applications that are powered by in-memory computing platforms such as SAP’s Business Planning and Consolidation powered by SAP HANA can help run more plan iterations at whatever level of detail is required. The speed of in-memory computing enables planners to ask iterative questions which speeds learning. It also enables continuous monitoring by comparing actual run rates with expected trends. Multiple scenarios can be updated and evaluated. It enables organizations to adjust plans and take actions much more quickly, which can lead to better outcomes.
Companies are harnessing in-memory computing to find disciplined ways of finding and repeating successes. Driver-based models are being built to rapidly evaluate multiple scenarios, including expanded use of Monte Carlo simulations. Examples come from retailers, insurance companies, transportation, and oil and gas industries. New analytics such as sentiment analysis are also being incorporated. In addition to company-generated data, smart organizations are also reaching out to include the readily available and cost-effective external data on demographics of customers, market segmentation, competitive benchmarking, and evaluation of leading economic indicators.
The arrival of mobility has been signaled by the rapid adoption of tablets over the last three years (realize that Apple’s iPad first went on-sale in April 2010). Mobile devices are the key to gaining engagement from key stakeholders. It enables finance to become more strategic by moving their support capabilities directly in alignment with business needs. As Paul Hensley, CFO for Texas-based HOLT Caterpillar points out, mobility has made information “easier to use and allows finance to deliver more value to our employees so we (as a company) can take better care of our customers.” Tablets create the ability to take action wherever or whenever, driving greater participation, accountability and better results. Simply put, mobility enables you to go faster, which is vital in today’s volatile world.
Mobility greatly enhances the ability of finance to convert planning from a monthly batch mode into a continuous planning approach. It facilitates remote input of data and reporting back of results. Key performance information can be monitored in real time often using graphical formats to better visualize what the information means. These features make it easier to implement rolling forecasts, scenario planning and continuous monitoring of results. Swifter response also comes from locating planners side by side with operations. Being in the field can greatly enhance communications and speed response time. Finance can shift from being merely a fact checker into being a real-time collaborator.
Additionally, mobility can enable quicker planning updates. For instance, departmental units can take a rapid look at the demographics of their workforce – many organizations face large turnovers in experienced staff as the baby boomer generation moves to retirement. What hiring and/or training plans are needed now to avoid massive skills shortages?
In another example FP&A managers can help support regional sales managers in tracking the execution and results from a regional sales campaign. The daily updates of each salesperson activity can be pulled from the CRM system. These can be aggregated for the entire region with early results being used to project the expected overall outcome, which in turn can be compared to original plans. These examples show how FP&A is moving into the field for more proactive support of operations.
Mobility also amplifies scenario planning by enabling more people to be involved in potential responses. Mobility enables efficient gathering of input, evaluation options and developing more rapid responses. That is very critical when considering all the global factors that could require scenario plans. All these things are more powerful in combination with each other and when leveraging existing technology investments.
I would like to thank SAP for their support of this series and in the investigation of how Planning Best Practices are being transformed by cloud computing, mobility and in-memory computing. When I began this 12-part blog series the number of articles about cloud computing, Big Data and mobility seemed to be growing from a trickle into a drum beat. As I wrap up this work the flood gates have opened and the discussion is rushing past. The challenge for all financial professionals has moved beyond finding information to sorting through the noise to find what is truly useful.