By Gavin Fallon, General Manager – UK at Intelligent Planning leader, Board

Global conflicts, rising inflation, and abrupt weather changes are just a few of the disruptions that financial executives will have to deal with in 2023. Investors are more careful than ever with what they put money into, leaving businesses in standstill. Furthermore, supply chains sit at the crossroads of a shaky economic climate and a changing global environment. Finance leaders are experiencing an economic climate that is almost as demanding as it was at the beginning of the epidemic and require effective assistance in navigating the difficult terrain.

Whilst finance departments have little control over this swarm of external factors, they can reassess their priorities and their internal financial planning processes. Here are some ways businesses can rethink financial planning in order to thrive – and not simply survive – in an economic downturn. 

Forecasting potential challenges

The effect of this perfect storm on businesses is the struggle to predict customer activity and financial resources. This is primarily because inaccurate forecasts discourage investors – not reaching predicted earnings targets and over or underspending can reduce trust and cause slower reactivity when economic troubles hit. As well, FP&A determines cost cuts and layoffs that can be detrimental to a company’s health and financial wellbeing. Business leaders will find themselves in a shrink mindset if they can’t accurately predict the changes that need to be made, or, alternatively, not make drastic changes unless necessary.

An insecure economy makes FP&A simultaneously more essential and more difficult. Enterprises are also shifting their geographic perspective, altering investments to align with countries in financial trouble and global tensions.

The control and planning of budgets has never been more essential in predicting challenges, mitigating the consequences, and still striving for growth. Planning across industries is key for finance leaders to judge the distribution of resources with little waste. Many companies are stuck in the dark ages of spreadsheets – with the increase of data available, manual planning is not efficient nor accurate enough to act and react.

Become more proactive and predictive 

The pressure on finance teams is particularly high because they are responsible for adapting to disruptive events and ongoing trends. Financial planning and analysis (FP&A) strategy plays a vital role in determining a company’s financial health and pointing toward adjustments.

However, traditional FP&A is stunting organisational growth. Time and effort is wasted in calendar creation and monthly planning that eats into the time it plans. Teams are uncoordinated and planning documents are out of date, causing a backlog nightmare.

 And this is just to keep up with real-time capabilities – predictive planning is another beast entirely. For many enterprises, the transition to digital processes seems daunting. There are too little resources, too many vendors to consider and constantly evolving data strategies.

This can cause stagnancy in companies’ progress and growth, which they can’t afford in the economic environment they’re faced with today. Companies need technology that makes them quick, flexible, and keeps them in that growth mindset.

Unlock automation to revolutionise intelligent planning

When we’re faced with unprecedented struggles in an economic recession, we should use existing tools to our advantage. A phrase we’re all going to tire of hearing this year is: ‘how do we do more with less?’ According to McKinsey research from June 2022, almost 70 percent of top economic performers versus only half of their peers are using technology to surpass their competitors.

Intelligent FP&A technology allows teams across an organisation to work in complete collaboration, teams contributing their share of knowledge to one cohesive platform. Sales and revenue information, warehouse-to-floor management and team coordination all become one, single automated process.

In addition, companies don’t lose precious resources to endless administrative tasks – such as updating spreadsheets. The most effective FP&A platforms produce real-time updates and have the structural capacity to predict challenges ahead.

This level of automation involves much more integration than the original approach of attaching a FP&A system to the side of existing workflows. FP&A technology should underpin the entire organisation, establishing planning from the forefront of its work. Planning across budgeting and daily processes will  lend itself to more accurate and timely decision-making, keeping a company competitive through this challenging climate.

 Integrate AI solutions into decision-making

AI solutions can sound intimidating to enterprises used to more traditional methods. However, planning can give organisations unfathomable strength and adaptability in their FP&A structure. Intelligent planning not only predicts cross-sector challenges and aids in mitigation, but it maintains growth as a goal. 

Business leaders should go back to doing the best leadership work they’re hired to do. Their time and value are less likely to be wasted if an automated platform is aiding them with informed, comprehensive decision-making. Intelligent FP&A solutions drive accountability and efficacy, leading financial teams to clear goals and strategic objectives. The forecasting process leads directly to the evaluation process, and decisions can be evaluated holistically. 

Fundamentally, the focus for many businesses this year is to work towards a market-competitive advantage in an increasingly unstable financial climate. Finance departments don’t need the latest fad, nor do they need to completely revolutionise their existing business models. The trick isn’t to reinvent the wheel, rather work with technologies already proven to work – and work well. Intelligent financial planning and analysis technology recognized by independent analysts like Gartner could potentially hold the key here, and proactively predict and provide insights into upcoming developments, challenges and trends in the industry, to keep businesses ahead of the game.