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Future-facing financial planning

Focusing on four big features that matter

The face of financial planning keeps changing. Organisations across industries continue to realise that traditional spreadsheet-based planning can no longer support the rapid needs that emerge from accelerated business disruption.

The increased need for flexibility, and the need to support greater business sustainability, means that organisations must establish a more agile foundation for finance—one that is built around accurate real-time data and intelligent digital capabilities.

As tools such as SAP S/4HANA, SAP Central Finance, SAP Analytics Cloud rewrite the possibilities for the enterprise, many leaders are asking themselves what the future of financial planning looks like. Answering that question will involve understanding what financial planning should be and can be—rather than simply plugging in new digital tools and expecting them to work magically. The goal? To get accurate, consistent, timely, and inherently useful information to support better decision-making and more efficient business processes—across every dimension of the business, not just the finance organisation. By transforming financial planning, you can begin to unlock layers of value across the enterprise—to help each part of your business act faster on opportunities, get ahead of challenges, and give your organisation a competitive advantage. Four traits ultimately will define a future-facing financial planning environment.

Accountable. Finance is inherently complex. It extends deeply into every area of the business. It encompasses regional requirements as well as global. And the information it relies on is constantly evolving. In any organisation today, knowing who is accountable for what piece of information can sometimes feel like a mystery. The good news is that modern digital solutions can allow you to embed and enforce accountability throughout your financial planning landscape.

Organisations still must take an active role to create that accountability. It does not come automatically. It requires harmonisation to reconcile processes, KPIs, and data dictionaries across the business. Processes and information that work well for finance purposes in one business area may be insufficient for another business area. Defining a top-down approach that aligns methodologies and automates responsibilities at every point can ensure that the right data and meaningful information is captured.

Integrated. Financial users are constantly searching for information—such as sales and operations numbers, or headcount data. And the information is out there, floating in many places. Laying a foundation to support financial planning can therefore be laborious and time-consuming. In some businesses, financial planners might spend months out of the year hunting data, consolidating it, cleaning it, and moving it around. In addition to delays, a lack of integration across systems and processes can also result in variances in data, potentially leading to inconsistent and disjointed financial planning.

Given today’s need for business speed, agility, and accuracy, data can no longer reside in silos—digital or otherwise. Effective, future-facing financial planning requires integrated data, systems, and processes that are built with business objectives in mind. Master data management is an essential building block of integrated financial planning—to get things “right” from the outset and avoid timely customisation of data at the point of need. System-to-system integration is another key step—and one that can be extremely painful and time-consuming for organisations. Luckily for SAP customers today, integration among SAP systems as well as non-SAP systems is becoming easier—with prebuilt integrations that allow organisations to consolidate data and readily build a uniform single source of the truth for financial planning.

Story-based. Numbers and data can tell stories. They can reveal trends, preferences, possibilities, and realities that may not be readily apparent. More information and more integrated information can reveal a bigger and more complete story. The benefit? You can become more accurate, more thorough, and more predictive.

A story-telling mindset becomes essential for financial planning capabilities that are future-facing—that can help you understand the history of your business, identify “what comes next,” and take action. Intelligent capabilities such as machine learning and AI can take you far—to automatically identify relationships in your data, make connections, and generate insights. But that’s not enough. The ability to add to “the story” is critical—to be able to attach documents, link to supporting data, and generate customisable scenarios that are based on questions such as “How do we adjust cash flow projections in light of unforeseen supply chain disruptions and demand for specialised resources?” or “How will a wave of retiring employees affect labour costs or business output?”

Actively work to discover and define the narratives that your company needs to build with financial planning. As part of that process, think about the ways in which storytelling can enhance your organisation's analytics maturity and self-service reporting. SAP solutions naturally include features that support a narrative—such as data visualisation tools and the ability to easily incorporate additional enterprise information. But you should strive to ensure that processes and end solutions include things like a user-friendly interface, including a value-driver tree—so anyone with financial planning responsibility can use it to understand the story behind the data, create their own narratives for specific needs, make better predictions, and take action to achieve business objectives.

Predictive. The tendency for many businesses is to react to disruption—to respond after the fact. Keeping pace with disruption, or even getting ahead of it, can feel like an impossibility. Yet forecasting and budgeting inherently calls on organisations to make predictions about the future. How much will our business grow? Where and when will it grow? How much will we need to spend? Where and when will we need to spend it?

But the questions do not and should not end there. With greater accountability and integration, the data, processes, and systems used for financial planning can help organisations ask more and better questions—and get better answers faster, using data that is reliable, consistent, and available in near real time.

They can begin to ask questions such as, “What are the moments that really matter? What specific events can we predict?” And intelligent technologies and scenario-planning features embedded in solutions such as SAP S/4HANA and SAP Analytics Cloud can help make financial planning even more predictive. For example, machine learning, AI can eliminate manual work, save time, and reveal more relevant insights, while “what if” features and other tools can give people greater visibility, flexibility and control. More than that, a more predictive posture for financial planning can allow businesses to become insight-driven organisations—knowing what actions they need to take to prepare for challenges, opportunities, and ongoing disruption.

See more and do more … sooner

Financial planning capabilities that prioritise accountability, integration, predictiveness, and story-telling can help organisations better prepare for future uncertainty. It’s an approach that can unleash benefits such as more meaningful insights, accelerated processes, self-service capabilities, reduced costs, and planning capabilities that are consistent across the enterprise—so you can spend less time managing data and disruption, and more time driving value. Want more insights that can help you move your organisation forward? In our next blog post, we will take a closer look at the future of finance—through the lens of predictive analytics.

Discover more insights that can help you unleash new value with finance and analytics. Read our other articles in this series.

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