Data-driven planning helps businesses remain agile

By Nadine Pichelot, EMEA vice president, finance, Anaplan

26 May 2020

Between storms Dennis, Ciara and Jorge and the global outbreak of the novel Coronavirus, global disruption has sent shockwaves across economies in the first half of 2020. Meanwhile, UK businesses are still scrambling to prepare for the real Brexit coming at the end of the year. This complex and volatile environment has put an emphasis on business agility as decision makers must act quickly and effectively to mitigate risk, pivot strategies and drive business continuity as change occurs. Now more than ever strong insights are critical to success, and with most teams working remotely, business leaders need line of sight across the organisation to ensure operational decisions align with financial priorities. 

Often times business leaders rely on point solutions, spreadsheets and historical data in order to assess the current market landscape and make predictions about the future. However, these manual tools can be fragmented and prone to error, opening the door for data to be misrepresented and misinterpreted. At the same time, today’s unprecedented level of disruption means historical data is no longer an accurate indicator of future trends or behaviors. As a result, business leaders need stronger insights from outside and across the organisation in order to make impactful decisions that maintain liquidity and drive business continuity.

Leveraging a connected approach to planning, forecasting and analysis can help arm decision makers with added intelligence and greater visibility as they navigate their organisation through continued volatility. With a connected solution, data from the farthest points of the business—from sales and finance teams to manufacturers and supply merchants— is automatically consolidated into a single, unified environment. This holistic view ensures business leaders not only have line of sight into real-time data from different teams across the organisation, but external insights that will contribute to operational and financial decisions. By breaking down siloes and combining external insights with internal data, businesses can model and compare nuanced scenarios, spot trends and develop data-driven forecasts that enable decision makers to anticipate and react quickly to market changes.

Take ASK Industries as an example. The OEM of car audio systems wanted more consistent finance and sales processes across its global businesses, including its request for quotation (RFQ) process. ASK’s financial processes lacked harmony and collaboration, with teams across business lines and markets crunching and consolidating data in isolated spreadsheets. The organisation was looking to break down silos, accelerate “what-if” analysis, and strengthen their ability to support a growing and increasingly complex business.

Guided by an Accenture team and using the Anaplan platform, multiple processes at ASK were reimagined as four connected models:

  1. Request for Quotation (RFQ) and CapEx Planning (the investment budget)
  2. The Sales Budget
  3. Income Statement Forecasting (P&L), Balance Sheet and Cash Flow.
  4. Medium and Long-Range Planning

Request for Quotation (RFQ) is the process Ask Industries uses to manage complex bids and evaluate financial impacts. This area benefitted from the upgrade to connected planning more than any other, because every department, from R&D and manufacturing to finance, contributes to as many as a hundred RFQs every six months.

Each RFQ has hundreds of variables – from currency, the type of car audio component, where components will be built, to volume pricing and so on. Getting all these variables right minimises risk, while getting them wrong could mean creating a quote that’s not financially viable.

Being able to carry out “what if” analyses on various potential scenarios from suppliers, as well as outside variables like exchange rates and commodity trends, is essential for producing an RFQ that wins new business and leads to a profitable contract. Before Ask Industries used connected planning, this analysis took a day or more. Now, it takes literally 10 seconds, with zero risk of human error.    

What’s more, because the four models are connected, each one informs the others. Numbers from the RFQ model feed into the sales budget model, and that, in turn, generates inter-company cashflows and feeds them into the P&L and balance sheet model. One, two, and three-year figures from the P&L then flow into the medium and long-range planning model, which generates 15-year time horizons for fixed-cost structures. To complete the cycle, this data is then fed back into the RFQ model where it’s used to evaluate profitability for future RFQs.

As companies continue to grapple with complexity and disruption the need for nimbler business operations is undeniable. A connected, intelligent approach to planning, forecasting and analysis equips business leaders with fast access to actionable insights from across the organisation, so they can be more predictive as they develop real-time strategies that will drive continuity. With stronger insights and greater visibility across the organisation, decision makers can deploy efficient and intuitive processes that will help optimise the business for success amid rapidly changing environments.

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