Leveraging Technology To Drive Better Planning Metrics

Leveraging Technology To Drive Better Planning Metrics

Brian Kalish 27/06/2018 5

Organizations are under increasing pressure to make well-informed decisions quickly based on data coming from various sources. Now you can leverage technology that speaks to multiple systems to develop meaningful planning metrics with an agile, intuitive interface that allows users to analyze their data in a more productive manner. Luckily, the advances in the technological tools available provide the opportunity to make that leap to a higher, better-constructed, and ultimately more useful set of planning metrics.

The Challenge: Data Availability

I have had the good fortune to travel all over the globe, speaking with financial planning and analysis (FP&A) decision-makers across geographies, industries, sizes, and corporate structure. The single most important factor cited as either facilitating or impeding the use of metrics in planning is the availability of data to construct the proper performance measures. The importance and criticality of master-data management can never be underestimated.

We have to be able to convert data into actionable insights, transform those insights into knowledge, and share, communicate, and explain that knowledge to our business partners. This way, we can craft the proper planning metrics going forward. The tool that can perform this financial analysis magic is a robust planning and analysis solution, or P&A.

In its most basic form, a P&A is the component of business intelligence involved with monitoring and managing an organization’s performance as a function of the organization’s key performance indicators (KPIs).

Recent research has shown that, by 2020, at least 75% of organizations will seek to improve the accuracy and actionability of their FP&A function by using operational data from multiple business domains. By 2020, at least 25% of organizations will achieve more collaborative, continuous, and consistent financial planning and performance management by closely linking key operational and financial planning processes.

By embracing digital transformation, organizations can powerfully impact the quality and value of their planning metrics. Creating robust planning metrics is often thwarted by moving variables, including numerous stakeholders, daunting amounts of data stored in various widespread and unconnected systems, and the sheer difficulty of quantifying metrics that aren’t easily quantifiable. Now, FP&A pros can overcome these challenges in defining innovative metrics that can assess planning performance.

Keep it Simple

When designing your planning metrics, I can’t stress enough the timeworn principle of "keep it simple". You will benefit from simple, easy-to-understand measurements that resonate across the business, despite the fact that calculating certain performance measures may still require complex modeling. This is where having a highly integrated P&A tool can make the difference between wishing on a star and actually landing on the moon.

Digital transformation, or the power of Big Data, is unfolding greater opportunities for companies to plan, predict, and communicate market trends, determine spending, and better understand customer behavior. Predictive analytics can change the way businesses plan and how they make decisions.

By gathering data, having clear objectives and goals, and activating evidence-based decisions, companies can streamline their planning processes and make smarter business decisions that adhere to the "keep it simple" principle.

As Albert Einstein once said, “If you can’t explain it, you don’t understand it well enough.” Keep it simple!

Organizations need to explore the technologies currently available that will permit them to create more useful planning metrics. They need to leverage technology to enable the consolidation of data from multiple sources. And they need to develop better dashboards, drill-downs, and other dynamic reporting tools to enable better communications, planning, and decision-making.

Upcoming Events

This year, we will be hosting a number of events all over the world where we will be discussing and diving deeper into these critical issues.

In addition to our Global FP&A Roundtable series, I hope to see you at Financials 2018 EMEA in Prague, October 16–18, and the Financial Excellence Forum in New York City.

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  • Matt Hattaway

    You are mostly correct however with the advent of unstructured data, deep learning has become a necessity in the finance industry.

  • William Jackson

    Interesting read

  • Lee Capeles

    Well explained thanks for sharing!

  • Ilan Miguel

    Interesting article

  • Ankur

    Thanks for sharing.

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Brian Kalish

Finance Expert

Brian is Founder and Principal at Kalish Consulting. He is Former Executive Director – Global FP&A Practice at AFP. He has over 20 years of experience in Finance, FP&A, Treasury and Investor Relations. He previously held a number of treasury and finance positions with the FHLB, Washington Mutual/JP Morgan, NRUCFC, Fifth Third and Fannie Mae. He has spoken all over the world to audiences both large and small hosting FP&A Roundtable meetings in North America, Europe, Asia and soon South America. Brian attended Georgia Tech, in Atlanta, GA for his undergraduate studies in Business and the Pamplin College of Business at Virginia Tech for his graduate work. In 2014, Brian was awarded the Global Certified Corporate FP&A Professional designation.


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