In the UN’s Online Services Index (OSI) for 2020, the UAE was ranked eighth globally, fourth in Asia, and first in the Arab world. A measure of the maturity of government e-services, the index – along with a series of other global metrics – establishes the UAE as a leader in digital transformation around the globe, according to Andreas Simon, Regional Director MEA at Jedox
But within organizations, digitization presents different challenges and opportunities for different stakeholders. CFOs and their teams are under pressure to optimize processes such as planning and reporting, but in doing so, there is also a path to becoming a more strategic partner to the rest of the business.
While digital transformation continues to make an impact, day-to-day tasks in Finance remain important. But the need for actionable intelligence that supports smart business decisions beyond budget spreadsheets has risen dramatically. This leaves CFOs in need of robust tools and up-to-the-minute data that will help them keep their finger on the pulse of their industry. Finance needs to be able to automate core planning, budgeting, and forecasting.
Enter integrated business planning
To address such challenges, the latest advancements in business planning, forecasting, and analytics come into focus. Integrated business planning holds a pivotal role in digital transformation. Embracing integrated business planning means Finance being able to streamline planning, budgeting, and forecasting across the organization.
Agility is key and enterprises need to be able to go beyond traditional long-term planning models and adapt to conditions that can shift quickly. This calls for new processes and comprehensive changes to classic Finance.
This degree of agility will require the unification of financial and non-financial data, for a more holistic view of the business. But this process is not without its challenges. Many aging legacy systems for planning are built around spreadsheets and lack integration with other systems and data sources. Spreadsheet-centric legacy systems, built decades ago, are often disconnected from detailed departmental plans.
This leads to action being taken at an abstracted level when rapid actions are required, rather than departmental input being sought. This often leaves finance having to retreat from strategic and performance-oriented areas to focus only on operational, transactional activities, which does not support growth.
From operations to performance enhancement
Once digital transformation, traditional models of transaction-heavy finance can quickly become more focused on enhancing business performance. Integrated business planning allows tighter alignment across departments. Compliance and controls in the planning process are boosted, and financial targets can be tied to the day-to-day activities of each department.
Under such conditions, it becomes easier to compare outcomes with goals and do deeper analysis of KPIs to understand any shortfalls. Performance monitoring and integrated planning together build a more agile environment where insights, and therefore action, come more rapidly.
Self-service modeling, under integrated planning, allows teams to customize rules and respond faster to change. Excel experts are not confined to the finance department. Every team’s spreadsheet guru can be empowered by the new integrated-planning platform to take more ownership of KPIs and operational rules and homogenize insights and action so that the enterprise acts as one.
Collaboration writ large
This collaboration is among the most important prerequisites of success for integrated business planning. Robust business performance hinges on collaboration, finance heads should concentrate on three key areas. First is automation, where financial applications can eliminate a range of pain points. Finance has an opportunity to drive its own automation agenda, not just for planning, budgeting, and forecasting, but in FP&A as well.
Second is the incorporation of forecasting best practices, which has become more important than ever in the post-COVID age. Best practices amid volatility include those that grant the ability to forecast and re-forecast more quickly so that finance can enable other departments to act quickly. Finance should concentrate on six key forecasting foundations: scope, participation, modeling scenarios, ensuring value from data and predictive activities, measurement, and culture.
After the first two deliverables are in place, finance can deliver on the integrated planning model, where inter-departmental collaboration becomes standard. CFOs will require the cooperation of sales, supply chain, HR, IT, and others. It is from this unified position that leaders across the business can have trust in real-time information – enough trust to make confident, value-adding decisions every day.
