CFO Journal: Moving Enterprise Business Planning Into Action

“Scenario modeling and predictive analytics are critical components of EBP’s one-model approach. For example, semiconductor demand is subject to volatility, as the need for chips must react to demand from multiple industries. Moreover, supply is constrained by the availability of critical inputs. Robust scenarios provide management with a ready course of action as incidents occur. Predictive analytics can also leverage external macro data to better inform those scenarios.”

Read More at The Wall Street Journal >

FP&A Trends: Navigating Uncertainty with Scenario Planning and Predictive Planning

“After careful consideration on how to extract much more value from forecasting activity while spending significantly less time on it, it’s been decided to

1. adopt a driver-based approach to forecasting, model strategic levers and resource allocations; 
2. build an integrated FP&A eco-system through standardising, centralising and integrating core FP&A processes in the FP&A Centres of Expertise.”

Read More at FP&A Trends >

FP&A Trends: How FP&A can Create Value for the Organisation

“For 12.5% of surveyed organisations, FP&A executives are able to spend 40% or more of their time on high-value activities. As expected, scenario analysis is being used 51% of the time, a 19% increase from 2020.”

Read More at FP&A Trends >

Institute of Management Accountants: Overcoming FP&A’s Biggest Challenge: Predicting the Future

The Institute of Management Accountants released a report that “is designed to serve as a guide for organizations trying to forecast what’s ahead in their markets”. It poses and expands on these 9 ways to improve forecasting in the future:

1. Expand the data available
2. Tools: Start small and add on
3. Use scenario planning
4. Address the knowing-doing gap
5. Model Building: Think causality
6. Establish data collection systems
7. Improve assumptions and estimates
8. Monitor results and quickly identify the business reasons behind variance
9. Improve analytical skills

Read More at Institute of Management Accountants >

CFO Dive: Data Is a Differentiator, But Much of it Is Wrong

“The good news is the growing recognition that fast access to real-time and accurate financial data is a strategic imperative. More than one-third of the executives (34%) are considering implementing or scaling automation solutions to increase the reliability and accuracy of their data, while 42% are becoming more focused on scenario planning and stress testing.”

Read More at CFO Dive >

Industry Week: Seven Strategies for Creating Business Resilience

Key strategies to prepare for “unpredictable supply chain disruptions”:

1. Plan for the Worst-Case Scenario
2. Leverage Integrated Systems and Technology
3. Improve Inventory Visibility and Flexibility
4. Establish Robust Forecasting and Planning Processes
5. Establish Flexible Manufacturing Processes
6. Reduce Lead and Cycle Times for Fulfillment and Replenishment
7. Drive Continuous Improvement and Innovation

Read More at Industry Week >

CFO Dive: For Spirit Airlines’ CFO, It All Comes Back to Math

“The cost-cutting challenge stems from the mismatch between the short-term nature of the problem and the long-term assets of the carrier. 

“We had to create different models that no longer considered fully allocated profitability,” he said. “We had to think of the marginal cost of the business, and decide what’s fixed in today’s world.”

Read More at CFO Dive >

Better Scenario Planning Helps Companies Benefit During Disruptions

“CFOs will play a key role in determining how various scenarios will impact revenue, the cost structure, the balance sheet, and liquidity. Three key areas can shape how companies prepare for and respond to the uncertain environment ahead: identify new data inputs, model data to understand how the business may behave under different circumstances, and act now to allow for flexibility under different scenarios.”

Read more at CFO.com >

Intelligent Scenario Planning with Advanced Analytics

Nobody understands Robert Burns’ quote, “The best laid plans often go awry,” like modern business leaders. When it comes to financial planning, finance teams need the ability to assess and adjust plans when they go off course. Intelligent planning starts with analysis of past results to help determine where is business is going, and measure future success. However, most planning processes are tangled in static spreadsheet processes that are error prone and limit agility. Modern businesses are leveraging intelligent technologies that provide the most up-to-date insight by analyzing the actual data being used by the systems of record. This enables users to react to analytic results in the context of their business process or workflow by creating scenarios that provide the insight to make strategic decisions.

Read More at The Digitalist by SAP >