Agile business planning is more important now than ever, and in these times strategic finance teams are taking the lead, driving cross-functional decision-making while planning for any scenario to mitigate risk, and keeping track of payment flows is part of that job.
Whether preparing for probable market changes or adapting to unexpected ones, top-performing finance leaders need to be adept at agile business planning in the face of uncertainty.
Successful uncertainty planning ultimately comes down to being able to quickly and confidently revise financial and operational plans. To get you started, consider several agile planning best practices.
Scenario modeling is an effective way to hone in on critical metrics and their potential impact on your business results, arming you with the insights you need to make tough decisions quickly and confidently. Scenario modeling involves testing your business plans against assumptions about existing and future scenarios and developing agile models to evaluate the impact of those plans on elements like costs, revenue, and cash flow. In order to do it well, you need to pick the right variables and business drivers to test and combine key performance indicators (KPIs) from across your business to see the direct impact of those variables.
Every finance team is charged with ensuring its business has enough cash on hand to accommodate periods of uncertainty. From taking on additional debt to pausing hiring efforts, finance teams need to be able to quickly make the tough decisions required to keep the business up and running under any market condition. Scenario modeling around cash flow is an obvious priority, but other important considerations include assessing your cash flow regularly - weekly if not more frequently; ensuring your business is sufficiently funded, including accessing additional credit and changing your accounts payable procedures; and using dashboards and other means of making data visible to ensure effective cross-functional collaboration around decision-making
Unlike static annual budgets which are tedious, manual, and become obsolete the moment a change is made, agile forecasting—re-forecasting not tied to a specific time period but done on-demand—gives business leaders a reliable prediction of long-term results based on real-time actuals and business drivers. In the most predictable conditions or in times of uncertainty, agile forecasting is one of the most effective ways to adapt your business quickly, consistently, and intelligently when things change.
You likely have some of your company’s most analytical minds in your finance department. Help them do their jobs better by giving them the tech-enabled tools and data they need to drive smart, agile planning across the business. If you’re assessing
Working in tandem, these features will allow you to make the best practices covered above systematic and scalable. They’ll also help enable integrated business planning with easier cross-functional collaboration and data discovery so you can combine people, processes, and technology to confidently plan for today and tomorrow.
