If 2020 taught us anything, it's that the ability to be truly agile is a key to success when faced with uncertainty. So much happened that was out of our control. Our only choice was to be flexible, resilient, and optimistic in the face of constant change.
Even now, as we start to move towards a post-pandemic world, uncertainty continues to be a sure thing. Agility, flexibility, and a continuous cycle of planning, modeling, and forecasting are required to not just sustain your business, but to also beat expectations. Those using modern digital tools had (and continue to have) the speed and agility necessary to guide their businesses through uncertainty.
As 2021 draws near, CFOs still have time to create a new vision for their finance team, centered on a continuous approach.
Modern Finance Needs Modern Tools
Transforming the finance department into an organization's strategic core requires an appetite for collaboration, a willingness to raise the financial IQ in every corner of the business, and a desire to compress cycle times by moving faster with more accuracy. Only by harnessing all three can finance leaders then see the opportunities and threats from a more holistic perspective.
Of course, you can't facilitate this level of insight and visibility with the antiquated tools that weren't cutting it in 2020, including spreadsheets. A new vision for your team means leveraging the inherent expertise of the digital natives in FP&A. They expect, and are good at leveraging, modern cloud-based platforms with an easy-to-use interface, simple integrations, and features that allow Finance to lead the business in creating powerful competitive advantages.
Accept that Finance is Continuous
Sales, production, marketing, support, operations, and hiring—they all happen continuously. Finance, on the other hand, traditionally works in cycles. There's a monthly close, a quarterly forecast, and an annual plan. To achieve agility, finance leaders need to adopt a more fluid and ongoing planning approach. Business is continuous, so planning and decision-making led by the finance team must also be continuous.
Continuous planning positions finance teams to take advantage of emerging trends or quickly react to the next black swan event, or even minor disruptions. This past year showed how much we all needed a plan A, B, C, and maybe more! Creating static plans adds little value when conditions are changing rapidly. CFOs seem to be well aware of this disconnect: a recent survey found that "more than 50% of CFOs see speed, agility, and digital enablement as key characteristics of future-ready organizations."
Continuous planning, where you're constantly updating models and reforecasting based on current actuals, lets you course-correct in an instant. It also gets you closer to data across the business by collaborating with all budget holders on decisions that benefit the entire company, not just a single department.
Include Every Corner of the Business
Continuous planning provides many benefits, but you need the data to make it happen. Easing the burden of slow data downloads, manual copy-and-paste, and spreadsheet version control is where a modern FP&A cloud platform helps immensely.
Access to data not only helps you make better decisions, it helps you help the business make better decisions. Accurate and comprehensive insights bring Finance, HR, Sales, and every other team into a conversation where everyone understands the goals, sees the progress, and can strategically balance people, costs, and business needs. You can raise everyone's financial IQ while staying connected to their decisions and keeping an eye on progress and roadblocks. This approach eliminates friction across applications and, instead, offers a one-stop-shop for everyone.
Be a Modern and Confident CFO
The past year has set the tone for modern CFOs. The pandemic created a greater need for CFOs to be at the top of their game. The c-suite and the board will continue to expect fast updates to plans, models, and forecasts moving forward, but a recent survey also found that nearly all CEOs want the CFO role to increase. This combination of speed and more responsibility will require accurate data from across the business, robust modeling and reporting capabilities that inform decision-makers, and widespread collaboration. Most importantly, it takes a finance leader who recognizes that since business is continuous, finance must be continuous too.
CFOs who can successfully lead with a modern, continuous approach will be the ones who win. Is that you?