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Connected planning

Connected Planning is the process of integrating the plans across functions to enable improved insights, and reduce information siloes. The static business plans of yester-years are ill-equipped to handle the current market dynamism and lack the necessary capabilities, to inform short and long strategic decision making.

Connected Planning is an effective forecasting method that has been used over the years. However, organisations often struggle to effectively optimise it to realise all the benefits it can provide. As tools and systems continue to develop over time, organisations should actively strive to maximise their capabilities.

To enable Connected Planning within an organisation, we must ensure certain components are aligned:

  • Data – a single version of the truth that allows organisations to link operation and financial data
  • People – collaborative ways of working across different planning functions
  • Process – alignment of processes across the organisations, including planning calendars, business drivers and business hierarchies
  • Tools and technologies – use of common planning models leveraging cloud-based tools and technologies, where appropriate

What proportion of respondents have embraced Connected Planning?

Adoption of connected planning across the organisation

Our latest insights suggest that organisations are aware of connected planning and the benefits it might bring into their planning process. However, the adoption of connected planning is relatively limited compared to other planning methodologies.

Based on our findings, 31% of organisations have embraced connected planning across three or more of their business functions. Of these respondents, 68% state all functions of their business are connected to each other.

Adoption of Connected Planning across industries

The remaining 69% of our respondents only have two or less functions connected to each other, with 10% of these respondents having zero functions connected to each other, with 10% of our respondents having zero functions connected to each other.

Financial Services are leading the way in Connected Planning, with TMT a close second when it comes to the industry breakdown of having 3 or more connected functions.

How connected are functions to other parts of the business

Finance lead the way in connectivity, but sales is not far off. Where organisations are utilising connected planning, we see the Finance function as the most connected across the organisation. With the importance of the annual budgeting and financial planning processes, Finance is required to capture inputs from across the business and align key assumptions.

Following the Finance function closely, the Sales function is also a highly connected function in the business, with 39% of organisations connecting this function to all other functions of the business.

Our research indicates that in those organisations who have adopted connected planning, Finance and Sales functions have been connected the most, standing at 84%. Workforce & Marketing are by far the least connected functions across the respondents, standing at 41%.

How does Connected Planning relate to Forecasting Accuracy?

Accuracy of forecast based on connectivity of functions

Connected planning can benefit an organisation in two distinct ways; improve accuracy of their forecast and provide efficiency gains in the time that it takes to complete the process.

Our survey results indicate that there is a strong positive correlation between the number of functions connected and the accuracy of the forecast. Where an organisation has connected three or more functions together, we see 50% of these respondents having a variance from actuals to their forecast of less than 5%. Whilst the remaining respondents with two or more functions connected hold a variance of less than 10%.

How does planning efficiency relate to Connected Planning?

Duration of planning process based on connectivity of functions

Planning efficiency can be measured from the time taken to complete the planning process; the shorter the planning process, the more efficient it is.

63% of respondents who have connected all their business functions completed their forecasts in less than 3 weeks. Contrary to this, 54% of respondents who have no functions connected also completed their forecasts in less than 3 weeks.

Just 5% of respondents who have all functions connected took longer than 6 weeks to complete their forecasts. Comparatively, 13% of respondents who have no functions connected took longer than 6 weeks to complete their forecasts.

Based on discussions with Chief Financial Officers and Financial Planning & Analysis leaders, we are seeing leading organisations:

  • Exploring the idea of Connected Planning and are actively looking at ways to improve it by reducing information silos;
  • Have finance as their most connected function in the current landscape, with sales being a close second; and
  • Improve their accuracy of forecasts and the time that it takes to complete the process, as they derive the benefit of having more comprehensive insights.

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