Finance is constantly tested to keep pace in today’s business environment. To keep up, planning needs to become a continuous process that spans departmental boundaries and enables managers to collectively realign resources to respond to market changes.
Organizations must streamline disparate sales and operational planning with traditional financial planning and analysis by using technology to connect people, data, and processes across the organization.
In this report, discover Harvard Business Review’s three steps to moving towards finance-led integrated business planning:
- Focus on metrics and analytics tools that drive growth
- Increase business-user collaboration for continuous forecasting
- Treat integrated business planning as an enterprise-wide initiative
Report introduction:
As Richard Dobbs and his co-authors pointed out in a Harvard Business Review article published in October 2015, “Although we can expect global revenues to grow by 40 percent or more over the next decade, increased competition from the Far East and disruptors invading traditional markets will cause global profit margins to drop by a couple of percentage points.”
Good or bad, disruption has become a common business term that has threatened many traditional organizations. Companies such as Uber, Spotify, and Airbnb are disruptors—using digital technology to create new business models to upset the value inherent in existing markets. The phrase “the new normal” has been used to describe the business environment created by this uncertainty, volatility, and disruption. But companies may see this as “the new abnormal,” presenting organizations with new challenges to deliver the predictable and sustainable returns that investors expect.
In this new market, every business function will be tested, with finance facing a kaleidoscope of different growth rates, regulations, reporting, currencies, and tax practices. It will be a major test to manage their financial and nonfinancial performance across all parts of the enterprise.
To achieve this, planning needs to become a continuous process that spans departmental boundaries and enables managers to collectively realign resources to market changes. This strategy will provide the business a full understanding of how the changes it makes will impact future financial results.
In order to grow in this rapidly changing economy, companies face the need for innovation—not just in products, but also in their business models and strategies. Organizations must streamline disparate sales and operational planning with traditional financial planning and analysis (FP&A) by using technology to connect people, data, and processes across the organization. These shifts in strategy will deliver a more holistic way to view and manage the business, providing the agility needed to create and sustain a competitive advantage. This new way of doing things has been called integrated business planning—something that every business can greatly benefit from achieving.
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