5 Reasons Finance Teams are not Equipped to Plan Properly
Written by Chris Harman, ICit, 15 April 2020.
Table of Contents
- What are the issues facing finance teams?
- Why do finance teams need the right planning tools?
- Why is financial planning tool adoption not widespread?
- How can you put your financial planning in safe hands?
- What’s the best way to select the right financial planning tool?
What are the issues facing finance teams?
Finance teams are being asked to prepare all manner of budgets, forecasts and multiple scenarios given the uncertain environment in which we are operating. There are many organisations that don’t have the right tools in place to meet with the financial planning agility that is required to operate in such hostile trading conditions.
Our belief is that we are going to see that organisations who have the best planning people, processes and technology in place will perform significantly better than their competitors.
Why do finance teams need the right planning tools?
However, the reality is that most organisations in the UK do not have the technology that they require to react as quickly as they need to. They can no longer afford to just muddle along with antiquated technology and processes. In order to compete effectively and manage their resources appropriately they need to be able to plan at high speed.
With all this in mind, it is quite alarming that the majority of organisations do not have the planning and reporting tools that they need to succeed in an ever-increasing competitive market.
Why is financial planning tool adoption not widespread?
In our experience we see 5 recurring reasons why modern Planning tools are not adopted as widely as they should be in the UK.
- Cost vs Value– The perception is that planning tools are expensive to deploy. This is a big misconception. The CPM solutions that we deliver typically have a payback period of less than 1-year. In contrast to other investments that companies are making we see a lot of disproportionate thinking around cost versus value with these solutions.
- Internal Advice – In many cases Finance is given poor internal advice and told that what they are using, which is generally either a ledger system, an out of date legacy solution or spreadsheets, are fit for purpose and all that is available.
- Perception that efficiencies that don’t exist – Senior finance leaders see the output from the budget and planning process but often don’t understand the effort that is required to deliver them (including overtime and weekends). The fact that a modern planning solution can increase productivity by more than 50% and shave weeks off the process.
- Lack of Awareness – Our experience is that many finance teams are not aware of the CPM tools on the market today. Therefore, the benefits of process automation and time to value that they can bring to planning and reporting cycles are a missed opportunity.
- Internal Effort – Historically, planning solutions were both expensive and a drain on internal resource and ongoing maintenance (often provided by over stretched IT departments). Those days are long gone. The modern cloud-based CPM solutions we deliver typically take between 8-10 weeks elapsed time to implement – with system ownership firmly in the hands of the financial planning and analysis team with little or no dependency on IT.
With an increased focus on delivering revenue targets, managing costs and liquidity more effectively, the adoption of an easy to use, powerful and modern planning solution has become critical for success.
How can you put your financial planning in safe hands?
With over 20 years’ experience, 450+ projects and 250+ customers, we have seen every imaginable challenge in delivering successful FP&A projects. ICit can help you to design and plan the solution around your requirements.
We work collaboratively with your finance team to transfer knowledge, share best practice and to deliver a successful project in a matter of weeks. See our Consultancy Services for more details.