Disruptive innovation in financial planning
Disruptive technology has been the welcomed game changer in the finance industry for years, changing the processes and the opportunities within the industry entirely. Business tactics, strategies and processes are continuously evolving as a response to these technological disruptions; corporate financial strategies are shifting focus from cost-saving and record-keeping towards intuitive planning, analytics, and best practices, resulting in agile adaptability. However, even with changing business practices and increasing opportunities available, the clinging presence of traditional spreadsheet planning is holding back finance departments from evolving.
The inefficiencies of legacy planning systems are often being touted in leading business magazines, such as Forbes, highlighting the need to replace and innovate spreadsheet-based systems over multiple articles. The following state the benefits of embracing modern planning systems over spreadsheets:
These articles emphasise how the usage of traditional spreadsheet planning is outdated, and inefficient in the modern era, recommending the adoption of more effective innovations such as the Connected Planning approach. But interestingly enough, spreadsheet planning has been shown to be outdated for at least the last decade. So why is it still prevalent within modern business structures in the first place? To get a better grasp of why spreadsheet planning is still used, let's have a look into its history.
Past Practice vs Modern Innovation
Past Practice: Traditional Spreadsheet Planning & ERP systems
Historically, traditional planning processes were utilised by corporate finance professionals to deal with tasks such as record-keeping and managing financial data reports. If we take a stroll down the finance history lane, we can better understand the staying power of spreadsheets. Starting in the '80s Microsoft Excel® was the unrivalled innovation that supported these professionals through providing a platform for formulas, spreadsheets and cells. It allowed for, what was, simple organisation of financial data and the reporting of actuals while having the capacity to simulate numbers for what-if planning.
As time went on, technology evolved; more and more data amounted, the landscape of business was changing and the downfall of spreadsheets began. Spreadsheets lacked the reliability, dimensional capabilities and processing ability to keep up with the flood of data that comes with modern business. As a result, spreadsheets had lost the financial planning crown, but not without a fight. To this day, spreadsheets still have not gained the capabilities to keep up with modern business, but they are still bogging down the planning processes of businesses everywhere.
Fast-forward a decade and enterprise resource planning (ERP) solutions were introduced as the new champion of innovation.
ERP systems were introduced within the '90s, simplifying and systemising business processes. The capabilities of these systems helped finance teams deal with the big wave of data that came from transactions. But - as bad luck would have it (or inconsiderate innovation) - ERP systems did not support management, planning and reporting, so spreadsheets still had a place and were being utilised to fill in the gaps. As a result, finance teams manually imported and exported data between their ERP platforms and Microsoft Excel. This process provided a band-aid solution to FP&A's problems, dealing with the necessary issues, but not necessarily dealing with them well. As we know band-aids don't fix bullet holes.
Time continued to progress, and more complexity and innovation was brought into finance. Technological disruption continued to occur with new solutions being available for businesses, while finance teams continued to incorporate more data into legacy planning models. The rise of globalisation, shifting economies and changing consumer demands added more complexity to the business dynamics in finance. Consequently, the pressure to adapt to these transforming market conditions became greater, and more difficult, as spreadsheet technology was immobile and cumbersome.
Finally, back in the present day, it should be of no surprise that these traditional manual planning and reporting processes are not doing well in handling the layers of complexity, uncertainty and volatility of the modern business environment. Because of these inefficiencies, many finance teams struggle to provide reliable and timely insights.
Modern Innovation: Cloud Technology & Connected Planning
Now that we are up-to-date, we can focus on the latest modern day innovation: cloud technology. The introduction of cloud technology enables a great number of advantages for FP&A teams, allowing them to shift their focus from collating data to identifying insights and strategies that influence vital business decisions. Cloud-based tools can automate processes such as long-range planning, annual operating planning, and forecasting processes, allowing for more time and effort to be focused on other critical areas of a business.
However, cloud technology itself is not all equally effective. Implementing a cloud-based tool into FP&A processes is only a first step in accelerating operational efficiency and stronger business collaboration. Connected Planning technology takes these autonomous processes further and provides a great range of benefits for finance teams.
Connected Planning technology elevates finance solutions, it is flexible: being able to adapt and integrate traditional legacy solutions onto the cloud and build from those methodologies. Furthermore, it offers a unified platform for all sectors of business that bridges together collaboration and financial processes under a streamlined system. A Connected Planning platform not only innovates finance planning processes, but it improves upon it holistically.
Financial transformation through Connected Planning
Financial disruption is the key to growth in the industry; Connected Planning provides the necessary tools and capabilities for businesses to thrive under the current market with agility, effectiveness and differentiation from competitors.
A Connected Planning platform such as MODLR puts an ease to the complexities of financial data analytics, collation and planning. MODLR enables real-time updates and zero-distance input between a shared collective of people across the company, all under an integrated platform. This provides finance teams with the ability to continuously analyse business performance and make real-time adjustments to forecasts, strategies and plans in response to changing conditions of the market. MODLR's systems also align processes to business drivers affecting demand plans, as well as financial strategies with corporate objectives, goals and KPIs. The inefficiencies of manual inputting and time-consuming data collation are furthermore dismissed, making financial planning and reporting far more streamlined.
While there are plenty of perks to using MODLR, such as customisable interfaces and SMS messaging, perhaps the most important is longevity. Unlike spreadsheets and ERP systems, MODLR will not go outdated. In fact, the inherently customisable nature of MODLR allows solutions specific to your business to be tailor-made just for you; spreadsheets and ERP systems can even be integrated and built upon. This means that MODLR will adapt and grow with your business, supporting you all the way as you tackle the turbulent tides of modern business.
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