Nine Essential Steps for Strategic Planning

All corporate functions do strategic planning, but few do it well. Strategic planning is critical for forward-looking organizations, but short-term planning activities often leave little time to pursue long-term strategy. The mission for business leaders is to identify initiatives that will drive enterprise growth ambitions, and unlock the capacity (time, budget, talent and technology) needed to fuel them. Most companies are now pursuing strategies that have a greater risk of failure, and often involve business model change that creates a complex set of coordinated changes across the business. Gartner suggests 9 steps that provide a guide for leaders to effectively prioritizes the successful execution of critical initiatives that are tied to overall business goals.

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Turn Strategy into Actionable Plans with Next-Level FP&A

“Few processes within the purview of a CFO have so much potential to create—or destroy—business value than FP&A”

A recent study from the Institute of Management Accountants (IMA) found that in general, top performing organizations take a more rigorous and integrated approach to their FP&A practices by relying on businesses insights to drive results, not just predict them. Unfortunately, many companies are not achieving the full potential of their FP&A activities because they tend to put more focus on forecasting and budgeting, rather than the core principles of planning and execution. Forecasting and budgeting are certainly important, especially in communicating to the organization if it is on track to achieve its business outcomes or to raise warning flags. But forecasting results is not the same as building a plan to actually achieve them. Planning and execution are what will determine success.

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Modern FP&A Leaders Need to Upgrade Their Playbook

“In a world of digital transformation and constant disruption, analysis must keep pace with queries that will change midstream and anticipate questions that have yet to be asked, but should be.”

 The ability to turn around insightful analysis in a timely manner is key to being seen as a modern business. To remain competitive, mature reporting processes must become more of a comprehensive playbook that provides decision makers with actionable insight in real-time. More mature processes rely less on spreadsheets, and favor purpose-built FP&A solutions that provide access to common databases, manage data scenarios and related workflows, and ensure transparency. Immature financial planning capabilities often resemble a shadow budget process, with simplistic reports, scarce analytics and a lack of business-value insights. When it comes to business planning, level of detail used must be appropriate to test a hypothesis “what if” in a way that has business relevance. Successful FP&A organizations often have the ability to provide faster and more predictive analytics, adjustments on the fly, and an emphasis on high performance through leveraging advanced analytics.

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The Art of War: How Successful Manufacturers Arm Their Business with Analytics

Similar to martial arts, business success is all about perspective. Instead of focusing on the capabilities their organization lacks, business leaders should understand what they can do with what they have. First, they must find the tools that best-fit their business. Smart leaders arm their company with analytics and machine learning that provide critical insights that protect their margins and business. Martial arts and an analytics platform share the common thread of awareness. This allows business leaders to not only report on what is happening, but also predict what is likely to happen and plan accordingly. This prevents rash decisions that will negatively impact the business. Modern analytics platforms enable businesses to respond rather than react to anything that comes their way.

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Resolving Common Manufacturing Challenges with Process Optimization

To continually grow as they has in the past, discrete manufacturers must deal with some unique challenges. Without a robust and integrated modeling platform, they often struggle with lack of business visibility, little to no access to actionable insight, excess inventory, and declining profits. The lack of innovation in the business process and technology aspects of manufacturing has many businesses heading into a downward spiral. Consequently, competitors that continue to meet customer needs are the ones that will succeed, both now and in the long term. Short-term vision and planning can mean long-term failure or stagnating growth. Customer demand on organizations to demonstrate flexibility and continue to meet their requirements – but with more product variations – is now the reality of today’s discrete manufacturing industry.

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Strategic Planning in Today’s Volatile Business Climate

“If there’s a single theme informing the C-suite’s most pressing challenges today, it’s the unrelenting pace and scale of change.”

Businesses are facing the harsh reality that their traditional approach to finance planning is not up to the challenge of establishing assumptions, defining objectives, and allocating resources over a specific span of time. In addition to grappling with a constantly shifting business, technology, and social landscape, today’s strategists must confront more complex planning variables than ever before, while the diversity and scope of their decisions has also grown.  No one can predict the future, but today’s leaders can help shape it by understanding the long trajectories that connect it to the past. Rather than be indecisive in the face of uncertainty, leaders can consider multiple possible future scenarios and plan their next steps accordingly. By doing so, they can help to build a more dynamic and scalable business overall.

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The Total Cost of Effective Budgeting and Forecasting

Plans, budgets, and forecasts can be some of the most valuable contributions that finance makes to the business. Ideally, they help organizations know what’s coming down the road and remain agile enough to respond to uncertainty and to keep the business moving forward. The goal of these processes is to produce planning, budgeting, and forecasting that help provide guidance and decision-making support for the business. The key consideration is not necessarily how much organizations are spending on the process, but instead whether organizations are making better decisions. When FP&A plays a strong business partnering role and is in frequent conversations with the business, the challenges, opportunities, and pain points of plans, budgets, and forecasts become visible quickly.

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Three Pillars for Actionable Supply Chain Planning

While supply chain managers understand that uncertainty and volatility come with their territory, they also hold the responsibility to properly understand what will happen next and how to react to it.  Still, many lack the insight necessary to navigate through unforeseen changes that could affect the business in any way, at any time. For a business to transform their supply chain, they must first build a solid and strategic foundation that can bring their supply chain analytics as close as possible to real time operational processes. More than ever, users need insight on demand, supply, and environmental events in real time. Embedded analytics can provide that insight and even streamline processes by automating decision-making. To help meet the challenge of supply chain volatility, leading organizations are focusing in on three key pillars for a better supply chain strategy.

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Simulation Capabilities Are Giving Manufacturers A Major Advantage

Simulation capabilities are being used by manufacturers everywhere to help decision makers understand what has happened or will happen in the future of their business. In the case of additive manufacturing, simulating the material properties and the processes embedded in devices, helps OEMs guarantee that they have the right combination of material and settings to manufacture the necessary part. This ensures the part strength, support structure, and other key requirements will be met so that the part will be successfully produced. Finance departments use simulations for scenario analysis and planning. They want to answer the questions, “what will happen if…?” and be prepared for potential outcomes. With manufacturers focusing more on financial planning & analytics functions to drive their strategies, they need the ability to confidently and accurately predict the impact of internal and external changes on both costs and profits.

Read More at Manufacturing.Net >