Is your plan secured for the future?
The next 30 years will bring more change than the past 300 years. That statement in itself exciting and surely a little scary for many people if you think about what we accomplished the last 300 years.
I attended Affecto Forum 2015 where I listened and tried to understand the digitalization guru Ville Tolvanen, who was moderating the forum. My Finnish is not that good, but I understood the overall theme. The next 30 years will bring more change than the past 300 years. That statement in itself exciting and surely a little scary for many people if you think about what we accomplished the last 300 years.
One example of how fast things can evolve came from Risto Kuulasmaa, at that time Head of TV and Online Media YLE, who was one of the key note speakers. His example was how our consumption of video/TV has changed rapidly in a very short time. Figures from YLE, MTV and YouTube were presented and they showed a clear trend and how rapidly it’s gone.
These rapid changes create both opportunities and challenges for businesses. We have seen young innovative companies take over traditional markets with technologies such as Uber, Whatsapp etc. We have also at close range seen big companies like Ericsson and Nokia in the Nordic countries previously in the top three globally in their field, where the leaders today are completely different players. Ericsson and Nokia look very different today from how they did then.
The fact that things change with increasing speed is something that most people can relate to. So what impact does this have on the corporate planning process?
So here are some thoughts based on what the market saying right now, and with the experience of our own customers’ stories:
- Many companies are planning on assumptions and thoughts based on historical results. What happens when the actuals changes faster than we can change our plans? To forecast based on old data is all too common, and most people feel that it’s not quite right.
- A traditional process with a budget and two-three forecasts will still work for some organizations, but, the thought process towards change needs to get started. Companies that have already taken steps towards future-proof systems and more frequent forecasting will have an easier ride.
- Customers have expectations of BI and self-service as well as on the planning where operations themselves can make changes in the process to keep their schedule and direction and not be dependent on external resources and others calendars.
- Rolling forecast on revenues and utilize drivers such as high occupancy rate, FTEs, and other KPI values that the business recognizes.
Finally, I offer three pieces of advice to consider in order to be future-ready:
- Make sure you have systems that get you ready for the future. Rolling activity based forecasting will be a reality for many organizations in the coming years. Also keep in mind to not change your process and system at the same time. Acquire a system that you can continuously work in, and then start changing the process. If you do both at the same time there is a risk that the change management will be too great.
- Decentralize the process throughout the organization and let business controllers out in the organization own their process.
- Those of you who are still working with Excel as a budget tool: Stop that immediately!
Bernt Olsson is the Chief Marketing Officer at Effectplan and believes “Nothing is impossible!”