# The case for continuous planning in a world turned upside down
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-05-18
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Continuous Planning: Adapting Financial Forecasting Strategies
Meta Description: Discover how businesses are adapting to the uncertainties of today's global climate by implementing continuous planning for agile and efficient financial
URL: https://financedigest.com/the-case-for-continuous-planning-in-a-world-turned-upside-downhtml

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_By **Dafydd Llewellyn,** GM EMEA_ [_insightsoftware_](http://www.insightsoftware.com/)

Businesses have always relied upon financial planning to make sensible, long-term decisions. Over the past year, however, the unpredictability introduced by the coronavirus pandemic coupled with macroeconomic confusion over, for example, post-Brexit trading rules and regulations has dramatically changed the nature of this planning.

Finance leaders everywhere have been forced to perceive and manage business risk in an entirely new way. The new global climate has exposed vulnerabilities in even the most careful and diligent planning processes which, if they continue as they always have, are at risk of becoming obsolete.

**Overhauling the planning process**

[Finance departments typically carry out planning](https://www.financedigest.com/data-analytics-scenario-planning-and-the-finance-department.html "Data analytics, scenario planning, and the finance department") on a quarterly, bi-annual, or annual basis. [Financial planning is still led with a focus](https://www.financedigest.com/cfos-need-a-focus-on-forex-in-financial-planning-tools-accountagility-reveals.html "CFOs need a focus on forex in financial planning tools, Accountagility reveals") on the annual budget cycle. These will tend to be complemented by quarterly updates, top-down assessments of the annual budget, based on the latest results and management initiatives. However, planning processes are usually characterized by collecting data from a number of sources, slow manual processes, and long planning cycles. This [planning and analysis will often be out of step with the actual pace of the business](https://www.financedigest.com/setting-the-pace-cognitive-financial-planning-and-analysis-for-business-agility.html "Setting the pace – Cognitive financial planning and analysis for business agility"). Couple this challenge with our current uncertain climate, and it’s clear that the planning process is due for an overhaul. The announcement of market changes on a daily – sometimes hourly – basis [means most planning cycles are no longer](https://www.financedigest.com/why-fundraising-no-longer-means-kissing-a-lot-of-frogs.html "Why fundraising no longer means kissing a lot of frogs") fit-for-purpose.

There’s also the issue of getting organisational consensus on a forecast, especially when other departments create their own forecasts in separate systems, disconnected from overall [financial plans](https://www.financedigest.com/best-guide-to-build-a-personal-financial-plan.html "Best Guide to Build a Personal Financial Plan"). Amongst other things, the current situation has also highlighted the [need for greater collaboration within businesses](https://www.financedigest.com/what-is-premises-liability-coverage-and-why-does-your-business-need-it.html "What is Premises Liability Coverage … and Why Does Your Business Need It?"), and the integration of operational and financial plans. After all, how can you produce accurate plans when you don’t know what’s happening on the ground in different regions?

Fortunately, recent advances in technology offer a means of addressing these issues, allowing organisations to adopt a [continuous planning mindset across](https://www.financedigest.com/workday-continues-momentum-across-europe.html "Workday continues momentum across Europe") all of its teams. No longer completed in isolation by the finance team, planning can now be inclusive of many different departments.

**Transforming the way we work**

In its most basic form, continuous planning is a forecast that’s up to date with current information. Many inputs to the planning cycle – both internal and external – are automated, allowing [finance teams to focus on modelling different business](https://www.financedigest.com/is-it-risky-to-use-bridging-finance-for-my-business.html "Is it risky to use bridging finance for my business?") outcomes rather than spending time on data reconciliation. Consequently, as a result, they’re better able to plan for, and respond to, different outcomes during periods of uncertainty.

The benefits of continuous planning have really come to the fore over the past year. The [impact of COVID-19 on businesses](https://www.financedigest.com/exclusive-qatarenergy-boss-says-world-cup-tension-will-not-impact-german-business.html "Exclusive-QatarEnergy boss says World Cup tension will not impact German business") has radically changed the outlook of and forecasts for businesses of all sizes. It has demonstrated a need for frequent re-forecasting, showing that the old ways of doing things don’t provide the necessary agility and efficiency. Indeed, the speed at which [companies are able to adapt to economic](https://www.financedigest.com/different-employee-engagement-outcomes-for-u-s-and-canadian-companies-amidst-continued-economic-growth-pressures.html "DIFFERENT EMPLOYEE ENGAGEMENT OUTCOMES FOR U.S. AND CANADIAN COMPANIES AMIDST CONTINUED ECONOMIC GROWTH Pressures") shocks such as those caused by COVID-19, altering and managing their cashflows appropriately, could make the difference between growing and simply surviving.

![Dafydd Llewellyn](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/daf-headshot-450x600-1736838323394-compressed.jpeg)

Dafydd Llewellyn

With the ability to see the impact on business forecasts, management can make more informed decisions on costs and restructuring or take advantage of other market opportunities. It’s little surprise, then, that [finance leaders are increasingly being asked for more accurate and flexible cash forecasting](https://www.financedigest.com/xactly-introduces-commission-expense-forecasting-solution-for-finance.html "Xactly Introduces Commission Expense Forecasting Solution for Finance") as the pandemic continues. It’s too soon to tell the full impact on businesses, but it is already transforming the way we work, requiring us to move to a more continuous rather than cyclical planning model.

**Realising potential**

The growing adoption of cloud and process automaton is laying the foundations for true continuous planning, opening a range of new capabilities. [Financial forecasts](https://www.financedigest.com/financial-forecast-for-2023-recessionary-fog-looming.html "Financial Forecast for 2023: Recessionary fog looming") today are more comprehensive than ever before, collecting data from many more data sources. Forecasts can be updated based on historical data within an organisation’s ERP, customer information in its CRM, and even [social media](https://www.financedigest.com/why-no-event-should-be-planned-without-a-social-media-strategy.html "Why No Event Should Be Planned Without a Social Media Strategy") “buzz” from its feeds. But the potential of these new data sources can only be realised if that [organisation](https://www.financedigest.com/tackling-the-complexity-of-data-within-financial-organisations.html "Tackling the complexity of data within financial organisations") possesses tools that can scale to manage the sheer volumes of data and user numbers involved, and that can handle the complexity of integrating a multitude of operational and financial models into one location.

[Identifying and automating an organisation’s internal data sources allows for forecasts to be updated](https://www.financedigest.com/new-gleif-challenge-facility-extends-ability-to-trigger-updates-of-legal-entity-identifier-data-to-all-interested-parties.html "New GLEIF Challenge Facility Extends Ability to Trigger Updates of Legal Entity Identifier Data to All Interested Parties") in real-time, reducing the amount of data-gathering and reconciliations typically carried out by the finance team. In addition, it’s possible to automate external data sources too, where this is relevant to a particular business, such as with commodity prices or airline passenger numbers.

**Constant stream of opportunities**

The prime benefit of automating the planning process and making it relevant to the [business in real](https://www.financedigest.com/the-real-reasons-why-winning-business-awards-is-good.html "The Real Reasons Why Winning Business Awards Is Good") time is that it allows an organisation’s Financial Planning and Analysis team to spend more time performing actual analysis. Given the global nature of business, this [means there’s a constant stream of opportunities](https://www.financedigest.com/could-brexit-mean-new-opportunities-abroad.html "Could Brexit mean new opportunities abroad?") to explore – for example, considering what would happen if materials were sourced from a previously unused territory, production was moved to a different country, or if a particular region’s marketing budget was increased.

A planning system that supports this type of scenario analysis is critical to maximising the opportunities available for [financial](https://www.financedigest.com/why-financial-planning-should-be-a-key-subject-at-school.html "Why financial planning should be a key subject at school") planning outside the traditional realm of the finance team and into that of business operations. The key to enabling this agile forecasting is to ensure we have a scalable forecast by extending planning to those on the frontline, in [addition to the finance team](https://www.financedigest.com/tailify-bolsters-leadership-team-with-addition-of-julia-burton-brown-as-commercial-director.html "Tailify bolsters leadership team with addition of Julia Burton Brown as Commercial Director"). This will allow the people who understand what’s happening on the ground to participate. Then, as their feedback and entries [roll up from operational plans](https://www.financedigest.com/should-i-roll-my-old-retirement-plans-into-a-roth.html "Should I Roll My Old Retirement Plans into a Roth?") into its finance plans, the organisation will enjoy a more accurate view of forecasting than ever before.

**Considerations for continuous planning**

Here are a few key points to consider when adopting a continuous planning mindset across your organisation:

1. **[Spend time forecasting](https://www.financedigest.com/paypals-spending-warning-casts-pall-over-upbeat-forecast.html "PayPal’s spending warning casts pall over upbeat forecast") what matters**

- Identify key business drivers
  - Identify five to 10 key business drivers before starting the planning process will greatly enhance the plan’s relevance and achievability, as well as [understand the key drivers of Revenue and Expenses](https://www.financedigest.com/understanding-the-different-levels-of-maturity-in-travel-and-expense-management.html "Understanding the different levels of maturity in travel and expense management"), and how these interrelate
- 80/20 rule
  - Spend time planning material accounts. For example, if a particular Revenue account makes up less than one percent of the total, [don’t spend a lot of time and effort planning](https://www.financedigest.com/in-planning-for-today-dont-lose-sight-of-tomorrow-avoiding-short-termism.html "In planning for today, don’t lose sight of tomorrow – avoiding short-termism") it. [Pick accounts that are material instead](https://www.financedigest.com/damien-hirst-burns-artworks-after-collectors-pick-their-nfts-instead.html "Damien Hirst burns artworks after collectors pick their NFTs instead").
  - Spend more time analysing the data instead of number crunching
- Focus on historical material variances
  - In which accounts, products, departments, or geographies do you historically see material variances?

And the value of this new forecasting approach? It will become more apparent that you have more time to perform analysis due to the significant time savings.

2. **Automate where you can, and leverage internal data**

- Planning has historically been a time-consuming spreadsheet-driven exercise, and as more people get involved in the process, the risk of errors increases
  - Automate inputs wherever possible. Among other things, this can link new leads in your CRM system to updated revenue forecasts, or allow a clear connection between the sales team and the actual forecast, updated in real time

3. **Involve all functional areas in the planning cycle**

- Planning can be finance-centric, involving a handful of people in [senior management](https://www.financedigest.com/senior-managers-regime-what-does-it-mean-for-the-industry.html "SENIOR MANAGERS REGIME – WHAT DOES IT MEAN FOR THE INDUSTRY?").

Today’s mobile- and cloud-based technologies allow greater collaboration between sales, marketing, operations, supply chain manufacturing, and finance with a single, unified system. This could involve different functions updating the forecast for latest projections, but also providing qualitative information from the frontline, such as a salesperson learning that a customer is [expecting lower](https://www.financedigest.com/commerzbank-keeps-outlook-as-lower-q3-profit-still-beats-expectations.html "Commerzbank keeps outlook as lower Q3 profit still beats expectations") than anticipated sales.

4. **Simplify inputs and outputs**

- If more functions are to be included in the planning process, it’s important to ensure they only have access to what they need. Although the underlying planning model may be complex, the input and outputs should be reduced to no more than the core information which different business functions need to access.

5. **Communicate the KPIs**

- Identify the key [metrics senior management will use to monitor the business](https://www.financedigest.com/5-fx-metrics-your-business-should-be-tracking.html "5 FX METRICS YOUR BUSINESS SHOULD BE TRACKING") on a daily, weekly, and monthly basis. That way the tracking of consistent KPIs throughout the planning process will ensure management can take decisions on a like-for-like basis
- The output of the [planning process should allow management to easily monitor actual versus forecast and test](https://www.financedigest.com/uk-not-planning-covid-testing-for-travellers-from-china.html "UK not planning COVID testing for travellers from China") the impact on the business of multiple scenarios

**Need for agility and flexibility**

Businesses have never needed to be as agile and flexible as they have over the past 12 months, as underlying financial and operational drivers are turned upside down. The new abnormal has forced finance teams to think differently and break traditional cyclical and quarterly patterns.

Collaboration and the automation of more manual processes offer the agility needed to create a continuous picture from which realistic and sound decisions can be made. There has never been a stronger business case for continuous planning than in this time of uncertainty.


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