Spreadsheets remain in use within most finance teams and it’s easy to understand why. They are virtually cost free; a flexible ad-hoc reporting tool and most people have a basic understanding of how to use them.

The temptation is high to ‘throw together’ a quick spreadsheet to solve an immediate problem, rather than going through proper processes. However, there is a distinct line between an ad hoc reporting tool and a scalable performance management solution, which truly underpins a company’s decision making.

There comes a point when spreadsheets can no longer support the business requirements. Scenario planning by its nature requires flexibility in being able to extract, manipulate and visualise assorted data in a variety of ways. To make sure that everyone is on the same page so that errors of interpretation do not occur, leaders should embrace technology and data, reinvent core processes and adopt new collaboration tools. Leveraging technology to make faster, more informed business decisions, with remote working employees all collaborating from a single data source is an investment well made.

Spreadsheets, however tempting, are a hidden productivity killer. IT expenses appear to be lower, when in reality, the cost to the business is much higher because processes are being performed poorly with spreadsheets.

During times of business disruption, finance and strategy teams will need to develop a range of scenarios, that encompass multiple eventualities. Then articulate clear trigger points for what financial actions the company should take and when.

This requires organisations to move from an episodic planning approach once or twice a year to a continuous planning process in which the planning decision making and execution happens on an ongoing “always-on” basis. By continually updating the forecast with actuals, the business will be able to quickly identify and adjust the levers that drive performance.

In many businesses, a continuous planning process might happen monthly. In a business that manages the supply chain and inventory decisions, the planning process might happen weekly. Although, in top resilient organisations globally, planning and execution decisions are made in near real-time based on the data and insight that resides in a platform, such as Anaplan.

During crisis conditions, finance must accelerate budgeting and forecasting work, providing continually updated business information that can then be incorporated into the forecast. The team’s update needs to become a true rolling forecast, and as such, data latency will not be acceptable.

The organisation should consider upgrading existing tools and connecting platforms to ensure accuracy of forecasts and projections without compromising efficiency. By investing in the digital infrastructure, organisations will have increase accessibility and flexibility to be able to build about alternative scenarios.

The CFO should consider establishing a cross-functional SWAT team, composed of key stakeholders from within (and potentially external to) their organisation, that can help understand and identify inputs that will be critical to scenario planning.

Once the planning is in place, the CFO should guide the creation of a framework that the SWAT team can use to make business decisions (such as rationalise projects) or monitor for conditions that may impact the planning. The team will require a real-time dashboard that enables them to focus on the seven to ten key metrics that will guide the organisation through the crisis period. Especially as they will need to monitor any decisions that will impact the organisation’s ability to resume normal business operations.

The team will need to test multiple futures, brainstorming multiple “what-if” outcomes for what may occur during a defined timeframe. They will then need to monitor events as they unfold to continually reassess the organisation’s strategic direction and assess which of the probable outcomes are most likely.

Once the most likely version becomes clearer, resources and budget will need to be allocated to ensure the ideas are operationalised. However, some agility will need to be required, if the landscape changes swiftly and new information emerges. Data analysis, modelling and scenario planning may help navigate complexity and identify the most likely risks, but there will still be risks that cannot be foreseen, requiring agility to respond.

According to McKinsey 1, greater technology adoption in finance could have lasting effects on the organisation’s overall resilience. Resilient organisations have leveraged the use of digital and/or automation technologies such as advanced analytics for business operations, finance as well as data visualisation including real-time dashboards for key measures of business performance.

For further information, including how a finance crisis checklist, download our finance resilience whitepaper.

Our next blog will explore how, once disruptions pass, organisations will need to look to the next normal, keep an eye on our social channels where we’ll be publishing details.