WHITEPAPER: The Genesis of Network Supply Chain Planning for our Modern World

The demands of today’s supply chain are challenged by dated sales and operations planning (S&OP) processes, complex global networks and increasing disruption from events.  S&OP processes typically have long execution times and infrequent cadences. This is suited to the “steady state” planning processes of the 1980s when supply and demand were more stable and balanced.

But given that complex global supply chains are increasingly operating in a world of rapid change, there is an urgent need for a new generation of supply chain planning; event-based network planning.

This whitepaper explores the need for a planning revolution, one that is event-driven, scenario-based and considers all inputs networked with one another.

Covid-19: The Lessons for S&OP

5 Ways to Achieve Supply Chain Resilience

5 Ways to Achieve Supply Chain Resilience

React, Recover, Realign

As Covid-19 and lockdowns swept the globe, unprecedented demand disruption followed, and businesses needed to react.  Long laid and intricate demand and supply plans were torn up, tossed aside and needed to be reformulated within hours.  With little time to run full S&OP cycles, many C-level executives were left re-planning their businesses in Excel despite multi-million-dollar investments in planning systems.  

Then, almost as soon as we were through the initial reaction, the challenges of the recovery phase were quickly upon us as it emerged that different cities, states and countries were reopening at different speeds and even prioritizing different sectors.  How this would translate into demand was almost impossible to predict, so we find ourselves in need of constant “sensing” of external data at a granular level, such as mobility trends, consumer confidence and even the financial health of our customers and suppliers to help us plan. 

At an unknown time, we will enter a final realignment phase as we return to normal.  Just as we were forced to abandon historic data on the way into the crisis, we will have to realign history on the way out.  However, as the dust settles, the biggest challenge for planning leaders may well be the looming executive post-mortems into why our S&OP processes were not better able to respond.

Should S&OP Have Performed Better?

One thing that’s certain amongst the current melee of uncertainty, is that companies will take a stark look at how S&OP met the challenges of the Covid-19 shock.  To use a highly simplified analogy, when cities in the world are forced to shut down with a mere dusting of snow, other cities such as New York or Chicago are able to effortlessly blast aside mountains of it. This is an indication of snowfall resilience and so post-Covid, we can expect to see a refocus on supply chain resilience. 

Supply chain resilience comes in the form of network resilience and also S&OP (or process) resilience.  Because S&OP is the organization’s brain, it needs to be ready to lead the response in any crisis.  Since the dawn of globalization, supply chains have become increasingly susceptible to shocks; as their global reach increases, events anywhere in the world can impact on seemingly local supply chains. 

It is snowing more often and we are certainly receiving more than a dusting.

So, in the post-mortem, we must ask not just whether S&OP is fit for purpose but also whether the definition of fit for purpose has just shifted. The “steady state” systems of yesteryear are simply not cutting the mustard.  The good news is that the ROI for upgrading S&OP is very compelling. The capabilities required to respond to shocks are the same capabilities that allow speedy and effective planning for the challenges we face on a daily basis (promotions, price changes or capacity changes to name a few).  So, by upgrading S&OP, we are not just buying disruption insurance, but we are also making the daily ‘planning brain’ of our business more effective.  We need only look to companies like Amazon and Apple to witness the competitive advantage that can be gained from network agility and planning resilience.  While their supply networks were disrupted due to the sheer scale of Covid-19, they fared extremely well compared to peers and remain global leaders on a day to day basis.

5 Ways to Prepare for Shocks and Improve the Day to Day

There are five key capabilities that will enhance day to day planning while also making us shock resilient.  The importance of these capabilities is often underestimated when designing S&OP for the “steady state” but their critical importance in helping us to react to shocks is almost always discounted due to the perceived infrequency of ever-increasingly frequent shocks.

  1. Top down planning / Executive overrides
    • Top down planning is essential for rapidly modeling new assumptions as the landscape changes.
    • Having quickly modeled these new assumptions, executive overrides can be implemented to adjust demand in a cascading basis at the click of a button.
    • Day to day, top down planning also lends itself to modeling the launch of new products and entry into new markets where macro assumptions are key.
  2. Event management / Scenario planning
    • After the initial shock and the use of executive overrides in a somewhat blunt manner, we need to begin responding at a more granular level.  This requires the ability to simulate multiple events and scenarios which can be approved at the click of a button. 
    • Day to day, event management and scenarios are also best practice for planning daily requirements such as promotions, pricing, demand shifts, capacity changes, and supply shortfalls.
  3. Workflows
    • As we shift to more granular event management and scenario plans, we need a more granular approach to approving changes to the plan. To support rapid response and decision making, adjustments that do not have an impact requiring executive signoff should be approved via local workflows.
    • Day to day, this moves the S&OP process from being a static cadenced process to a “living” plan, supported by real-time response and empowered decision making.
  4. Visibility
    • Insights enable us to effectively transition from executive overrides to more granular scenarios.  Insights are gained through the visibility of relevant and timely information.
    • This is not only critical in a crisis but, day to day, better supply network visibility is critical as the foundation for more agile and resilient supply chains.
  5. Demand sensing and Artificial Intelligence
    • The challenge with total visibility is in being able to transform mountains of data into information and insights.  There is no silver bullet here but strong demand sensing and artificial intelligence where applicable can help to connect S&OP to the pulse of the market in day to day and crisis modes.

Final Thoughts

Global networks need to be more agile and resilient in the face of more frequent storms.  As planning is the backbone of any response, S&OP also needs to be more resilient and agile.  This requires augmenting current capabilities. 

But it might not just be the day to day and the next storm that we need to prepare for.  There are likely to be structural supply chain shifts post-Covid. We will potentially see network de-risking with trends towards near-shoring and multi-sourcing in the quest for resilience.  And there are likely to be many aftershocks including geo-political tensions and supplier bankruptcies. 

So, we need to invest in planning capabilities to be more efficient day to day, to be ready for the next storm, and also to be able to plan for likely supply disruptions, structural shifts and geo-political tensions.

COVID-19: How event-based planning outperforms steady state planning during shocks

Unprecedented demand shocks of a differing nature

Who would have thought that, as we entered 2020, toilet roll would become the most sought-after product in the world? Or that so many people would be working and schooling from home?  Or even that our travel plans were about to be cancelled?  This new reality has created immediate and hard-hitting demand shocks for global supply chains.  Never before has planning been so under the spotlight. 

Certain types of demand have been largely destroyed (such as 2020 spring clothing collections), whilst others have exploded in the short term (toilet paper and home-working supplies). This has garnered news headlines, yet the impact of shifts in distribution channels has been under-reported, even though they are just as significant. Volume levels have not necessarily changed, but have shifted to other distribution channels. For example, lunches have moved from restaurants to the grocery channel as people work from home.  Even the consumer demand boom for toilet paper was not entirely driven by stockpiling; there has been a shift from commercial to consumer channels as people are now using the bathroom at home,as opposed to the office.  

Rigid and highly concentrated supply chains have struggled the most to adapt to the demand shifts caused by Covid-19, but even the most flexible networks have been unable to respond where planning processes are slow or rigid.  Indeed, many problems with ‘steady state’ planning systems have been exposed by the pandemic, but this has really just magnified the problems that planners face from smaller shocks every day, such as price changes, competitor promotions or supplier shortages.  Even before Covid-19, consistent surveys show that 50% of companies were not happy with their S&OP processes. 

Enter the new era of ‘event-based planning’.

Planning for the uncertainty of reopening

Demand (and supply) shocks have rattled global trade.  Whilst this has been devastating, the swift and definitive nature of it has meant that businesses have been able to quickly assess the impact on demand patterns.  The demand during reopening is going to be much less certain for a number of reasons. For example, different regions are experiencing increases in mobility at different rates and consumer confidence will return to different sectors at different times.  We may quite quickly become comfortable with buying a packaged sandwich, but we may not want to go to a restaurant.  Likewise, we might quickly return to local holidays while avoiding international travel for some time.  

This is going to be hard to predict and planning systems will need to continually sense, adjust, and recalibrate. 

Scenarios are the bedrock during uncertainty 

With such uncertainty, most businesses should have multiple scenarios planned. There may be comfort in having ‘the plan’ but in reality, during an unpredictable return to a ‘new normal’ we need to be able to respond to a multitude of situations. To do this, we need multiple scenarios in our planning systems and agility in our supply chain networks to match the range of necessary responses. 

The fundamental building blocks of plans must change from a sum of ‘steady state’ product and / or customer forecasts to an event-based, scenario-driven plan.  The plan needs to be based on events and scenarios that can be updated and activated or deactivated real-time.  The simple construct is as follows:   

  1. Events are things that could happen, such as a businesses reopening in June or a supplier going bankrupt.
  2. Scenarios are a combination of such events (such as reopening businesses in June with no supplier bankruptcies or reopening in June with multiple supplier bankruptcies).
  3. The plan is a base plan, overlaid with a set of selected scenarios.

While this seems so simple and necessary, the reality is that the majority of today’s planning processes and systems do not inherently support this approach. 

The lessons for planning from Covid-19

What the global pandemic has shed light on is that global supply chain systems are in real need of a rethink. So, what needs to change to prepare businesses for the next crisis?

1. Event- based planning

We need real-time, event-based scenario planning to respond to changing situations as demand and supply side shocks become increasingly frequent. Consider the pandemic a “stress test” of your planning systems. What hasn’t worked well in this situation is not working well with smaller day to day challenges.  

2. Networks 

Over the past decade, many organisations have focused on making supply chains as lean as possible, supplying goods around the world rapidly and cost effectively. But the pandemic has exposed a number of cracks in global supply chains, and organisations that have previously focused on developing the lowest possible cost supply chain could well be those who have struggled the most over the last few months. Just like a flood is a good reminder as to why we pay for insurance, Covid-19 is a good reminder as to why we need agility. Long-term lessons for global supply chains may include an increase in local sourcing, which even though more expensive, will deliver shorter planning replenishment times and more resilience.

Final thoughts

The changing face of demand during the Covid-19 crisis has shed light on how supply chains need to adapt for the future. Agility, real-time planning and digitalization are all needed in tandem to ensure that global supply chains are resilient and can weather any storm. Having the ability to quickly pivot in a crisis and plan for significant mobility changes, will become the make or break for business continuity in the future.

2020: the year agile business planning takes centre stage

2019 has certainly been a year of political and economic uncertainty. Whether it’s Brexit in the UK, protests in Chile and Hong Kong, trade wars between the US and China or even extreme weather affecting countries from the UK to India, businesses have been constantly reminded of the need to stay agile and respond effectively to unexpected events. This is alongside rapidly changing consumer preferences such as reducing plastic waste, eating less meat and an increase in the popularity of electric vehicles; all of which is shaking up multiple industries from consumer packaged goods to manufacturing and transport.

2020 has to be the year that business models evolve more than ever to keep pace with our changing world.

So, what is the answer? Agile business planning has to take centre stage in helping businesses stay one step ahead. But many would be forgiven for not knowing where to start. It comes down to balancing the rapid deployment of new planning applications against longer term digital transformation strategies.

With much disruption on the horizon, organisations must break any existing barriers down and connect all areas of the business to see where money is being spent, track sales performance and monitor the movement of products.

Businesses need to ensure that they are planning for every scenario and have every angle covered in 2020 and beyond. Only then can you jump on new opportunities and steal a march on rivals big and small.

With this in mind, what are our predictions for agile planning in the year ahead?

Larger planning teams will become more popular, including the rise of the Chief Planning Officer

While planning is not a new function, it is only set to evolve as business needs become ever more complex. 

In 2020, planning teams can further embed themselves into functions such as HR and finance to ensure that effective planning is becoming a daily task, not just an ‘add on’ to be carried out on occasion or for special projects.

To ensure that this is the case, organisations should consider the need for a new planning leader in 2020, one that spans the organisation and is the champion for all planning, analytics and decision-making – the Chief Planning Officer (CPO).

Organisations will be planning for international expansion

From trying to reduce economical impacts, through to responding to an increase in competition from new markets and meeting customer demands for new products and services, we can expect to see greater international expansion in 2020. In fact, research from Vuealta earlier this year revealed that 74% of global businesses were looking to expand into new markets.

While this will open further revenue opportunities, it will make planning more complex, including the need to integrate new market data into business plans quickly and effectively.

Integrated, cloud-based planning technology will be critical in providing the insight and agility needed for successful international expansion

Digital transformation – including connected planning and the rise of pre-configured apps – will continue to be a priority

With so much disruption and change within the marketplace, organisations need to be able to make changes to their planning based on market insight almost instantaneously. But research earlier this year from Anaplan showed that 75% of organisations take weeks or months to update plans with market changes. This is largely due to a reliance on traditional planning techniques involving historic trend analysis and human judgement, rather than current data, and largely based on manual, legacy systems

Therefore, digital transformation will be a key focus for business planning in 2020, focusing specifically on the ability to use technology to connect data, people, and processes across an entire enterprise.

By moving planning processes away from spreadsheets and other manual processes, to cloud-based technology, businesses can also automate and streamline tedious processes, which reduces human error, improves productivity, and provides stakeholders with increased visibility into performance

At this point, there’s so much technology out there, that businesses are struggling to see the wood for the trees. Much of the technology on the market now is so advanced and complicated that it’s hard to cut through the jargon and understand how to get the most out of it – even for those that are more technically minded.

Companies in 2020 and beyond need to seek out expert consultancy to advise them on how to make the most of it. Someone who can understand what business problems they need to solve and how that can be tackled with the right technology. For example, we expect to see a rise in demand for preconfigured applications, which can be deployed rapidly into planning operations, and deliver immediate results across businesses this year. However, specialist advice will still be needed to ensure that organisations’ balance the rapid deployment of planning applications against longer term, digital transformation strategies.

Intelligent planning and the use of Machine Learning and Artificial Intelligence, will grow rapidly in 2020

Intelligent planning – the application of Machine Learning & Artificial Intelligence (AI) to business forecasting and planning processes – is the next exciting step which some organisations will soon begin to take in their digital transformation journey, to enable businesses to exploit much more advanced analytics. In fact, 94% of organisations believe it will impact the future of planning.

Intelligent planning will provide the opportunity to consume, exploit and create actions based upon much larger volumes of data and identify patterns within it that would otherwise be impossible.

Based on data from both within and the outside the business, intelligent planning will be used by organisations to automate, predict and prescribe the right course of action for any business process, from forecasting and scoring, to optimisation and categorisation.

The potential for AI to transform business decision making is unprecedented. Big data, machine learning, and deep learning will be able to automate decisions and provide powerful insights into demand forecasting, promotions optimisation, procurement strategy and a host of other business processes.

2020 for many brings the prospect of more uncertainty. Will government leaders around the world rise up to the climate change crisis? Will the continual rise of AI start to really affect the labour market like commentators say it will? There may be no crystal ball which provides clear answers to these questions, but one thing businesses can do for certain is ensure that agile planning is in place, to future proof their operations for years to come

Planning for an intelligent future

Artificial Intelligence (AI) has firmly taken root in our everyday lives and in many instances, such as the smart speakers we find in our homes, this AI is apparent and relatively simple. But when you use that same speaker to make an online purchase, you may be less aware of the complex AI that is involved in the process of picking and packing that item in a warehouse and routing it for delivery to your doorstep. 

The world of business is full of similar use cases for complex AI, where the technology is transforming business performance. However, something that underpins all of these processes is the need for planning. For example, how did the aforementioned supplier know what the demand for their product was going to be in the first instance? This is where ‘intelligent planning’ – the application of AI to business forecasting and planning processes – comes in; another example of complex AI. Traditional planning techniques would have involved historic trend analysis and human judgement, but with intelligent planning, the supplier could have exploited much more advanced predictive analytics. 

Intelligent planning provides the opportunity to consume, exploit and create actions based upon much larger volumes of data and identify patterns within it that would otherwise be impossible. It can also remove the bias inherent in rules which have been defined and coded by humans. Based on the data it is fed, intelligent planning can then be used by organisations to automate, predict and prescribe the right course of action for any business process, from forecasting and scoring, to optimisation and categorisation.

But implementing any kind of AI technology isn’t a straightforward process and there are a number of considerations to take into account beforehand.

Understanding the opportunity for intelligent planning

Compared to current planning activities, which invariably work on pre-defined cycles such as weekly or monthly processes, intelligent planning can be considered to have more of an ‘always-on’ approach. Large volumes of unstructured data can be analysed in real-time to identify patterns that can be used to make decisions or simply recommend the appropriate course of action. As such, any business that has access to data that exceeds the volume that humans can analyse and understand, will need intelligent planning to remain competitive. 

For example, a large retail organisation can harvest data from millions of daily transactions to make better buying, customer engagement, and operational decisions. But they don’t need to stop at short-term future actions; instead they should consider using social media sentiment and detailed demographics to make longer term, strategic decisions around areas such as range, store locations and customer experience. 

Financial services is another prime candidate for intelligent planning, particularly where understanding and influencing consumer behaviour is involved, for anything from calculating the probability of a customer renewing their insurance policy; the likelihood of a loan holder defaulting on their payments; or the future spending profile of credit card customers.    

Intelligent planning will enable these types of businesses to produce increasingly accurate forecasts and allow them to apply more lateral thinking to the planning process.

Approaching planning in a strategic manner

With the opportunity for implementing intelligent planning being significant and broad, there is a risk that businesses could approach it in a ‘gung-ho’ fashion. Worse still, they could fall into the trap of looking for problems for a new solution to solve, even where those problems don’t exist. Businesses need to wait for the normal business challenges or opportunities for automation to naturally bubble to the surface, but when they do, they shouldn’t be tackled on a piecemeal basis.

Implementing intelligent technology can involve significant investment for companies of any size, so it’s important to approach it in a considered manner. Businesses, along with their IT and data experts, are still finding their feet when it comes to approaching and implementing AI technology.  They lack the experience born out of decades of more mainstream technology enabled change implementations. So, to try and overcome these challenges, the obvious approach to adopt is to pilot intelligent planning solutions in the first instance and if it comes to it, fail-fast.

Ensuring senior buy-in from the beginning

Smart business leaders start with a vision for AI and an up-front understanding of what it can do for the business. Given the potentially wide reaching impact of intelligent planning, the fact that it typically won’t sit in functional silos, that it is still extremely novel and that it can be hugely disruptive to any business, the decision can ultimately only come from the top. The C-suite therefore plays a huge role in sponsoring the introduction of the technology.

For these same reasons though, management can be hesitant to make any final decisions without having access to concrete evidence that proves it is worth the investment. But as the technology is still in development and emerging, this kind of evidence is next to non-existent. Added to this a gap in understanding of the technology that has only recently started to be filled, and people are only just beginning to appreciate AI as a real-life solution, as opposed to something from a sci-fi film.

Eventually, AI technology will become a more mainstream solution, but in the meantime, companies are going to come across an abundance of challenges to tackle before any solution can be implemented successfully. What’s more, it’s far too big a leap to take at once, so businesses need to make the transition to intelligent planning in stages. And on the journey from traditional siloed planning through to intelligent planning sits Connected Planning.

Connected Planning entails joining up planning activities across all business functions so that forward looking decisions ripple through the entire organisation, allowing the full impact of any single decision to be assessed holistically. Over the course of time, intelligent planning can and will be woven into a businesses Connected Planning ecosystem.

The Future of the Supply Chain

Read our latest research report to find out what businesses need to be aware of when managing supply chains in the modern era.

Uncertainty over Brexit is said to have caused more disruption to supply chains in the last five years than natural disasters and cyber-attacks combined. That’s one of the key findings of a new report launched today by connected planning specialist Vuealta, which found that 50% of UK business decision makers felt that Brexit uncertainty had negatively impacted their supply chain in the last 5 years.

In comparison, just over a fifth (22%) had suffered from supply chain disruption due to a cyber-attack, and 19% from a natural disaster. This was despite the fact that studies suggest extreme weather events have increased in the last six years, and a major cyber attack cost a global logistics business hundreds of millions of dollars as recently as 2017.

Other factors said to have caused a negative impact were through the failure of a single supplier (30%) and spikes in demand overstretching supply chain capacity (28%). The report also found that a fifth of respondents thought customers would feel the impact of a supply chain failure within a day, giving them little time to fix issues when they arise.

Despite the potential risks to disruption, many UK businesses were looking to grow, with 67% looking to expand into new markets. However, they were also conscious of improvements they needed to make to do that – 64% admitted that they needed to improve the efficiency of their supply chain. Real time information across their supply networks (45%) and collaborative planning with suppliers (41%) were two of the key steps to achieving that goal.

“UK businesses want to grow, yet they’re at risk of seeing critical supply chains and logistics disrupted by events outside of their control. They know they can’t control the weather for example, or what may or may not happen over Brexit, so it’s clear they need to focus on what they can manage. That means planning for all eventualities and being able to respond in real time” says Ian Stone, CEO, Vuealta. “This requires a connected supply chain ecosystem with transparency and collaboration between partners.  Those that achieve this will create sustainable and significant competitive advantage and will lead the race in the search of new markets and profit streams.”

The report also revealed that almost a fifth of respondent’s businesses (19%) have a supply chain that encompasses more than 30 suppliers, reflecting an often complex network to manage, particularly in times of disruption or change. The findings also demonstrate that business leadership often does not understand the potential impact on their supply chain, whether disruption be caused by a cyber-attack (42%), political or market uncertainty (47%) or a natural disaster (43%).

Ian Stone, CEO, Vuealta added, “With connected planning tools, organizations no longer need to be in the dark when it comes to the ‘what-ifs’ of supply chain disruption. Through taking control of their supply chain and giving themselves the visibility they need, UK businesses can find opportunities to succeed and ensure they’re protected against disruption, in whatever form that takes.”

The full report, The Future of the Supply Chain  can be downloaded HERE

Natural or unnatural: the science of planning for any disruption

From hurricanes and floods, to earthquakes and tsunamis, the world is experiencing a rapidly increasing number of adverse weather events. The Tohaku earthquake, tsunami and Thailand floods in 2011 are a prime example of how an apparently localised event can bring global supply chains, and ultimately the entire organization, to their knees.

But it’s not just natural disasters that supply chains have to contend with – businesses also face a plethora of unnatural disruptive forces, from political uncertainty and new regulations, to evolving technologies and a growing cyber-threat landscape.

Planning can be the silver bullet in responding to natural and unnatural threats. It sounds simple, we all do it, sometimes without even thinking about it. But there are a number of building blocks involved, which many businesses often forget about: integrated technology, common data, shared processes, and cross-team collaboration. These form the foundation on which a successful planning strategy is built.

When organizations get this right and achieve true connectivity across the business, the potential benefits are endless. But we need to move beyond traditional approaches in order to plan more effectively for today’s challenges.

Working on a consensus

The most common planning process in industry today, and the one recommended by many leading experts, is the consensus process. Groups, such as demand, sales and marketing teams are kept siloed and create their own plans before they are unified to create one final, or consensus, plan.

The problem with this approach is that it often leads to diluted accountability for the final result because, by definition, no single role, department or business unit can be held 100% accountable for the final plan. The process is also inefficient: by generating three plans that ultimately input into only one, businesses are effectively disregarding 75% of the output from each business units’ provisional proposals. What’s more, the process is slow to respond because, in order to accurately model the impact of unexpected events, you have to rerun it from start to finish.

Collaborating on planning

More and more businesses are beginning to realise that keeping the organization and its supply chain siloed simply isn’t going to work. Companies need to collaborate across teams and connect every part of the business, from finance and sales, to marketing and the supply chain, because when something changes in one area, it will ripple across the business, and you have to be able to respond at speed.

Collaborative planning helps to solve the problems presented by a consensus strategy by allowing different functions to own different inputs to just one plan. A truly joined up approach.

For example, with a collaborative strategy, one team may input a baseline forecast, followed by a team who input an organic growth uplift, and finally another team who make an input for a promotion. This means that there is only one plan, yet three teams have collaborated to achieve it. As a result, all three teams can be fully accountable for the accuracy of their individual inputs and assumptions because we can individually measure each of their contributions to the plan.

In addition to a 75% reduction in workload and increased response times, a hidden benefit of collaborative planning is that the process is particularly well suited to event-based inputs, which are truly the planning panacea.

Moving beyond traditional budgets: letting events drive the process

Traditionally, when organizations create multiple plans as part of the consensus process, they do so in a budget type format – something that is often remarkably similar to a household budget. But there are many common complaints with entering forecasts (and budgets) in this format. To name a few: there are a lot of input cells to review, there’s sparsity in the plan, granularity is lost, it’s not easy to change or move events and there isn’t a lot of context.

But if we break the plan down into the events that it is built on, rather than entering and analysing hundreds and thousands of cells of information, organizations can just record the key events that generate the output.

In addition to building out a story from the headlines of the overall plan, event-driven planning has additional benefits including workload reduction, the ability to quickly iterate plans just by changing any assumption, increased responsiveness, and the ability to assess scenarios and different options in real-time. In this way, you can create a living plan.

Ultimately, organizations and supply chains that take a collaborative, event driven approach to planning can not only reduce their teams’ workloads, but equally increase the impact of the work they are doing and the efficiency at which it can be done. And that planning has never been more vital to the wider business as unexpected natural and unnatural disasters are thrown at companies from every direction. Planning isn’t about making life harder; it’s about working together to make it easier. Whether businesses decide to exploit the change or avoid it, the key is to be prepared for whatever comes their way.

Uncertainty Can Generate Opportunity – Given the Right Planning and Insight

Brexit, regulation and cybersecurity – three words you would not have expected to be headlining a list of major concerns facing financial services companies a decade ago.

Yet, according to our latest research, The Future of Financial Services: Planning for Every Eventuality, these are now expected to be the biggest challenges facing business decision makers in financial services over the next five years.

Regulation and compliance issues continue to be a major disruptor, with the recent implementation of GDPR leading to an increasing number of companies that are struggling to meet requirements. And, with a decision over Brexit looming, the political implications only add to the uncertainty faced by financial services companies. This is supported by our research, which revealed that over half of UK decision makers highlighted the impact of political changes as the biggest challenge that their businesses will face over the next five years. Much of this anxiety is likely to be due to the chaos surrounding Brexit.

When you factor in other challenges highlighted by those UK respondents: namely data management and privacy (30%); planning and uncertainty in the market (18%); as well as disruption from technology (16%), companies are facing a perfect storm of threats to mitigate, external factors to manage and new developments to facilitate. This all adds up to a testing ecosystem – full of economic and political uncertainty – but one that is also brimming with opportunity for those businesses that navigate the period well and understand the environment that surrounds them. Now more than ever, businesses need to face the music with a fluid plan that covers all eventualities and possibilities, so they can manage uncertainty, adapt to change and transform business processes quickly.

Remaining calm in rising uncertainty

The industry is as unsettled as it has been in a decade, with the true implications of our divorce from Europe remaining unclear. As a result, it’s no surprise that UK decision makers see political change as a major challenge, with uncertainty clouding their every move. This hesitation brings its influence to bear right across the sector, from small players to market leaders – potentially impacting every area of business. And while many firms will decide to remain in London post-Brexit, over a third of the UK’s largest financial services firms have announced they will be moving to other European cities, with Paris set to become Europe’s post-Brexit trading hub. Dublin is another popular choice with Barclays recently announcing it’s moving £166bn of assets due to Brexit fears.

It can be hard not to panic against this backdrop. But however disconcerting, it’s crucial to remain calm as customers, employees and trading partners are relying on companies to make the right decisions – preserving as close to ‘business-as-normal’ as possible. That doesn’t mean sitting around and pretending everything is fine, like a 2019 Canute; it means putting in place plans that cover all the possibilities and eventualities. In other words, knowing the ‘what ifs’ and having a measured, effective response for any scenario. Do that, and businesses can steal a march on less organised competitors.

Greater transparency needed for compliance

Regulation and compliance has also taken its toll on the financial services industry and continues to be a struggle for many, despite the risk of heavy penalties. Recently, we saw Google fined £44m by the French data regulator for a breach of the EU’s data protection rules. Our research further demonstrated this struggle with 45% of UK respondents seeing this as the largest potential disruptor to their business over the next five years.

Focusing on greater transparency and data protection, this is exactly where technology and data has the power to transform – helping to tackle much of the complexity involved in achieving compliance whilst delivering instant access to the precise information needed to plan effectively. With the right systems in place, organizations can quickly connect and verify different data sources, whilst breaking down the silos to gain a much clearer view of what lies ahead.

But as emerging technologies such as artificial intelligence, machine learning, big data and digital payments disrupt traditional processes, there’s also a heightened threat from cybercrime to contend with. In fact, our research shows that UK business leaders feel this threat to be their second greatest challenge (44%) and potential disruptor (44%) over the next few years (behind ‘political changes’ and ‘regulation & compliance’ respectively). Business identity theft, for example, was up 46% year on year in 2017, and mobile cyber-attacks grew by 40% in that year alone.

Planning for every eventuality

But it’s not just cybersecurity and regulatory or political uncertainty causing sleepless nights for financial services as lower barriers to entry have given the green light to a host of new upstarts across the industry. From fintech companies providing loans and payments, to completely new high street banks – Atom and Metro are just two examples in the banking sector, plus the tech-behemoths of Amazon and Apple. Everyone fighting for market-share and challenging the long-held stronghold of traditional Industry players.

Confronted by these dynamics, it’s surprising that concern over competition isn’t more acute – with our research finding just 11% of UK business decision makers feel worried about the challenge from start-ups over the next five years. Organizations must ensure they don’t get complacent and take their eyes off the ball. Disruption can come from anywhere and the speed at which new start-ups can grab market share can be disconcerting. Companies need to ensure they are planning for every scenario, with all angles covered. Only then will they be ready to jump on new opportunities and steal a march on rivals.

Organizations should continuously be asking themselves if they’re truly getting the most out of their data. With effective planning and solid forecasting, businesses can unlock opportunities, get closer to customers and inform better decision making – from new appointments to investments. Having a connected approach to planning and forecasting, right across the business, will provide the insight to face the challenges and disruptions that shape the financial services industry.

It’s all about being able to move fast, and having access to critical data will reduce the impact of uncertainty and build realistic, actionable responses to all the ‘what ifs’.

Financial services businesses are not prepared for technology disruption

Leadership teams in financial services organizations “do not appreciate the potential impact of technology disruption” – that’s according to more than half (52%) of the business decision makers in the sector.

New research released today from connected planning specialist, Vuealta – The Future of Financial Services: Planning for Every Eventuality – reveals the array of challenges and disruptors that the industry will face over the next five years.

When asked what the biggest challenges their business would face over the next five years, respondents replied:

  1. Cybersecurity – 42%
  2. Political changes – 39%
  3. Regulation and compliance – 36%
  4. Data management and privacy – 31%
  5. Planning and uncertainty in the market – 20%

Ian Stone, CEO of Vuealta, commented: “Now, more than a decade on from the events of 2008, the finance industry is far from settled. It’s chaos at the speed of the digital era. In fact, the next five years are set to be just as dynamic as the previous ten – filled with challenges and disruption but equally, presenting opportunities for those that navigate the period well. To do so, it is crucial that businesses remain calm, proactive and pragmatic. Control what you can control and make sure you can react quickly to the things you can’t.

Amid the chaos, perhaps the most dynamic event in the industry in recent years has been the FinTech explosion. It saw global investment of $57.9bn in the first half of 2018 – more than it did in the entirety of the year before – and this looks set to continue. When asked what will be most disruptive to their business over the next five years, the respondents focussed on key technologies:

  1. Regulation and compliance – 45%
  2. Cybersecurity – 43%
  3. Artificial intelligence and machine learning – 31%
  4. Payments technology – 27%
  5. Cryptocurrencies – 25%
  6. Blockchain – 18%
  7. Big data – 14%

There are myriad challenges and disruptors for financial services organizations around the world. The key is planning – planning effectively, at speed, and with instant access to the precise information you need. However, The Future of Financial Services: Planning for Every Eventuality report also revealed that a large proportion of organizations are trying to run their business with inadequate planning tools and processes: only 50% of respondents claim to plan with “all departments working from one tool which is updated in real time”; more than a third (35%) keep planning siloed within departments; 38% use multiple documents for different departments which are then used to try and create one plan for the business; nearly a quarter (24%) share one spreadsheet across business units.

Ian Stone, CEO of Vuealta, concluded: “The temptation for many businesses can be to take a wait-and-see approach. Organizations need to understand the environment that surrounds them, have a clear view of what is approaching on the horizon and then connect that to their own business information – enabling them to plot a route to success. Through this connected planning approach, you can reduce the impact of uncertainty and build realistic, actionable responses to all potential ‘what ifs’. Only then can you be armed with the insight you need, at the speed you require to face the challenges and disruptions that will shape the financial services industry in the years to come.

The full report can be downloaded here.

About Vuealta

Vuealta is an international company providing tailored advisory, implementation and ongoing support services exclusively for Anaplan, a leading planning platform provider. A trusted advisor in business process and transformation, we work with global organizations to take a more unified and collaborative approach to planning – connecting people, plans and data to enable faster decision making. Vuealta has offices in Europe, Asia Pacific and the Americas.

How to go global overnight

Ian Stone shares his views on the factors that SME’s and hypergrowth companies need to consider to expand successfully.

Technology allows start-ups to ‘think big’ earlier than ever before and enables global expansion at pace, to rival larger enterprises. As the world becomes more connected and digitised – whether that’s the internet, social media, or big data and the cloud – businesses have access to better intelligence on global events and market opportunities. When harnessed properly, this information allows organizations to make faster and more informed decisions, such as opening an office or making an acquisition in a new territory. That expansion is a significant undertaking for any SME or hypergrowth company, but when armed with this real-time market and economic data, they can take that leap with speed and confidence.

Many of the established players have been taken by surprise at this speed and the rate that their industries are being disrupted by agile upstarts expanding into them – particularly the likes of financial services, FinTech and IT. Companies like Monzo, Airbnb, Coinbase, Darktrace and Uber have all flipped traditional thinking about banking, accommodation and travel, and security on their heads. And there’s no reason why others can’t follow suit.

Taking the first step to going global is not a simple undertaking, and businesses need to ensure that they plan properly. There are a few key factors they need to consider if they want to expand successfully:

  1. Access to capital – to grow quickly into new markets, SMEs and hypergrowth companies need fuel in the form of funding. Thankfully access to that capital is much better now than 10-20 years ago, with more choice than ever before. While traditional lending avenues with the major high street banks has stalled – £165bn lent in 2017, down from £166bn in 2016 – demand for alternative financing has soared. Many of these funding routes saw significant growth from 2016 to 2017 including: equity investment (79%), asset finance (12%), and peer-to-peer lending (51%). Not all of these will be right for every business so, it’s important for organizations to do their due diligence on which route works best for them when expanding into new territories
  2. Local market knowledge – Don’t underestimate local nuances. To succeed in a new territory, businesses need to understand the economic, cultural, governmental, and market conditions of that region. A one-size-fits-all model for a global company doesn’t work. Knowledge of the local language, cultural differences of doing businesses, the regulatory framework, and industry contacts are all invaluable to setting up operations in a new market. This can range from knowing whether to handshake, bow, or use formal titles at a business meeting, through to country specific policies on consumer data protection, or rules around data storage and cybersecurity
  3. Land or Expand? – when expanding into a new territory, SMEs and hypergrowth companies are faced with the decision of whether to acquire a local business or open new owned offices. Both have their merits and draw backs and depend on a huge range of factors – from capital investment to industry and product capability. What is important though is that, when opening a new office, ensure that you hire local talent with regional knowledge. If acquiring, find a business that aligns to your vision and wants to come on that journey with you. That means that you can get up and running fast – crucial for ventures into new territories
  4. Agile connected planning – despite the huge potential rewards, international expansion is not simple. The market and economic volatility that allows SMEs and hypergrowth companies to thrive, is also a danger to new ventures. You have to be able to plan for every scenario, model the potential outcomes and respond quickly. Monitor your key revenue lines and the plans that track them closely, reforecasting in real time based on these. You must continuously test and challenge these numbers to show that they’re robust and to avoid any nasty surprises

At Vuealta we are going through our own exciting expansion, having recently announced the opening of a New York office and the acquisition of Executit, to extend our offering into Northern Europe and Asia Pacific. As with all SMEs and hypergrowth companies looking to expand, we had to make these decisions quickly and decisively, but with complete confidence. By taking a connected planning approach to expansion decisions like this, businesses can have the agility and real-time insight they need. They can produce plans and projections for every aspect of the newly formed business, across cash-flow and revenue streams, through to modeling head count, customer or prospect pipelines, while accurately forecasting to mitigate against external risk factors. That “what-if” analysis shows you how the impact of the expansion could ripple through the wider organization, now, in a year, in two or five years, and beyond.

There are many factors to consider and hurdles to jump when SMEs and hypergrowth companies look to expand into new markets. Five years ago, we couldn’t have taken these steps, but when you have a better understanding and visibility of the potential outcomes, you can be sure that you have the ability to do it at speed, successfully. The concept of “going global” is more achievable now than ever before.

Why your tech capability should be on a job spec

Generation Z – those born after 1995 –are starting to enter the workforce at pace. Growing up with ubiquitous connectivity and evolving mobile technology has shaped Gen Z’s priorities for the workplace. 91% of this group say that technological sophistication impacts their interest in working at a company. This is hardly surprising, as they are now often described as the “ultimate technology natives”. Businesses need to not only deploy the technology that this new generation craves, but shout that capability from the rooftops, if they are to recruit the talent they need to succeed.

SMEs in particular – accounting for 99.9% of businesses and 60% of the workforce in the UK private sector – will become increasingly dependant on this demographic to drive growth. They are the latest group to enter the workforce, but also hold many skills and qualities – creativity and innovation the most highly prized – that will be important to these agile organizations. But competition for this new talent pool is fierce and this highly skilled younger generation places huge demands on their prospective employers.

Agile tech and working practices

Much of the discussion when millennials joined the workforce, positioned them as being “tech-savvy”. With Gen Z, this goes much further. We now have the first generation born into a world of social media, online gaming, and a smartphone in every pocket. Snapchat; Instagram; WhatsApp; even more so than the millennial generation (who’s key influences included Myspace and Facebook), Gen Z expect, receive and digest information instantly.

This demand doesn’t change when they walk into their place of work. Gen Z employees want the latest technology at their fingertips and to be just as connected – in the technology sense – at work as they are in their day-to-day lives. This manifests itself in several guises. Gen Z have always had access to any information or contact, from any location in the world – provided there is 4G or wireless. Increasingly, the same can be said for work – younger generations want the flexibility to be able to work from anywhere in a connected and agile way. Businesses need to make sure that they have the technology in place to facilitate this, as well as exploring more cultural initiatives, like the design of “third spaces” that encourage interactions outside of any rigid departmental boundaries or formalised meeting rooms.

Harnessing the potential of Gen Z

Their highly networked and tech-driven upbringing has fostered a more entrepreneurial generation in Gen Z. In fact, 72% want to start a business of their own in the future. SMEs can harness that motivated and strategic outlook within their organization if they give them a chance. Where possible, promote the freedom to be autonomous while still having the appropriate checks and balances needed. Flattening organizational charts and concepts of hierarchy – as well as providing constant opportunities to learn and develop – will all be important to attracting Gen Z. Many organizations are looking into concepts like “scrums” – agile breakout groups and teams – rather than rigid hierarchies.

This equally feeds into the work itself. When it comes to Gen Z, it’s not just about how they work, but what the work actually is. Using technology has placed a premium on their key skills like creativity, innovative thinking and the ability to understand and process information quickly. Organizations that can use technology effectively, automating laborious tasks like data entry, will better attract and unleash the potential of this new generation in the workforce.

Learning and development

Having grown up during the 2008 recessionGen Z are also naturally more pragmatic than their millennial predecessors, particularly appreciating the value and efficiencies that technology brings to the workplace. The influence of these more risk-averse times and familiarity with the rise of new technologies, has also made Gen Z much more conscious of the need to learn new skills to stay relevant and compete.

Gen Z have grown up with the world’s largest ever on-demand how-to video library – YouTube. With that bank of learning just a few clicks away in their personal lives, this new section of the labour force wants equally innovative solutions to appease that thirst for knowledge and development. Organizations are responding. The NHS, for example, has begun to train their doctors and nurses with the help of virtual realities. Instead of learning their trade in real-life operations and emergencies, VR technology enables them to acquire and train their skills safely. While not applicable to every business, it does highlight the need for organizations to better embrace new technologies and change workforce practices, when looking to attract and engage younger generations.

SME leaders must ensure that they have the technology and organizational flexibility that this new Gen Z workforce craves – and it’s not just about having an iPad on every desk. They want to be able to work from anywhere with agility and access to instant information, while being given the freedom to think creatively, learn and have a real impact on the organization. Having the right business technology in place sits at the heart of delivering on this and organizations need to take heed of those demands if they are to attract and retain Gen Z talent. In fact, that technology capability is so important, it should sit on top of every job spec.

The fight for equality now – not in 2047

The fight for equality in the UK approached a turning point on 4th April 2018 when companies were forced to reveal their gender pay gap. The results were as expected – almost eight in ten companies and public-sector bodies pay men more than women. But what did these results actually reveal? The figures and the quality of the data are far from perfect. For example, high-level executives including partners and non-employed, low-paid workers are not included. We cannot therefore confidently say that the results are representative of the reality of the gender pay gap within companies – or equality in general. It could be much wider or indeed narrower than we think.

We’re now three months on and despite the promise of change, official forecasts predict that the gender pay gap will persist until at least 2047. Which begs the questions – is it going to be worth the wait? And will it lead to fairer pay within companies?

The truth is that equality within business, particularly around pay, is so much more than the pure gender debate. We need to consider what it means in terms of ethnicity, age and ability as well. In October 2017, the Parker Review published its first report on ethnic diversity in the boardrooms of UK companies. The report revealed that only 8% of 1,050 director positions are directors of colour and more than half of FTSE 100 companies have no ethnic minorities on their board. It’s clear that the problem of equality is much more than the pay gap between genders.

That said, the gender pay gap reporting is starting to increase the visibility and importance of all equal pay legislation with employees and wider stakeholders. This greater attention is starting to shine the spotlight on pay inequity and raises significant financial and reputational risks for companies who are not in compliance with the regulations. Birmingham City Council is one of the more famous cases of the financial risk associated with equal pay. Losing its fight against thousands of women it underpaid for years cost the Council an estimated £1.1 billion. That’s not the sort of bill any company wants to foot.

So how do they go about putting in practical steps to start making progress towards greater equality now? Firstly, companies must take a good look at how they currently fair from an equality perspective. Having an understanding of the problem will make finding a solution much easier. From there, they can then develop a plan of action for the next three to five years because, let’s face it, it’s impossible to change everyone’s pay overnight.

Typically, these types of pay and diversity analyses are done in Excel. There are also some HR platforms that can do elements of this; they can help develop a hiring plan but won’t provide a long term overview and model different scenarios showing how the hiring plan will help address the balance of equality over time. For example, what if you find a group that’s sitting outside of the pay structure? You need to get them back in and track the progress on a rolling basis.

The only way to do this is by using a more modern, connected approach to planning. By using a joined up platform to capture, monitor and analyse how your company is performing against any equality goals you set, you can make changes much more quickly. You’ll also have real-time updates easily accessible. We’ve recently launched a new app, based on connected planning. It helps businesses analyse their current equal pay gaps based on previously defined pay components (salary, bonus etc.) and forecast what those pay gaps could look like in the future, if certain changes are implemented. The app will then create a report which shows how a business’ current pay gap differs from the forecast, demonstrating the impact of the changes you are introducing in real time.

Most companies do this type of analysis on an ad hoc basis, particularly those with large, complex workforces. That’s where more modern planning comes into its own. Local councils are a good candidate for example; they have complicated terms and conditions around hiring and contracts and within one pay grade could have multiple different roles, some of which might be unionised, or they’ve been transferred from a different organization.

Businesses need to start getting a handle on what equality within their organization looks like and plan to bring about change now. The momentum around equality is gaining and businesses that don’t show that they’re making steps in the right direction to address the balance could face massive financial and reputation risk. It’s impractical to suggest we can solve all pay gaps tomorrow, but surely we can do better than 2047?

For more information on Vuealta’s equal pay app, contact us.

The future of Fintech is a connected one

Between 2010 and 2015, the financial services industry changed drastically. In just those five years, four of today’s most successful fintech companies were launched; namely Stripe, Revolut, Starling Bank and Monzo. These launches all had one thing in common; putting the customer at the centre of the operation, untied to legacy or history. Fast forward and the fintech industry is coming of age, with the UK’s fintech sector alone attracting £1.34 billion of venture capital funding in 2017, and new companies launching into market every day.

This success means that the challenge these companies now face is one of scale. To keep moving forward, they need to be able to expand and scale up quickly and easily to support their growing customer bases. They need to do this at the same time as maintaining the flawless, fully-digitised customer service that they have become synonymous for. No easy feat.

How they play this growth period is therefore vital. They need to be fast in making decisions and flexible enough to adapt to the constant changes that are now part and parcel of today’s market. That means arming themselves with the tools and information that will help them achieve that.

The key is in the planning. As digital companies, fintechs already benefit from high levels of flexibility and adaptability. These traits must also be reflected in how they approach their business planning if they stand a chance of still being relevant five years down the road. A recent survey by Ernst & Young revealed that a third of UK fintech companies believe that they’re likely to IPO in that timeframe – a clear demonstration of the rewards that can be reaped from staying successful. What will set the successes apart from the failures is connectivity. A more connected company with a more connected approach to how it plans will be more successful.

By connecting their people, processes and data, fintech companies will be able to more accurately forecast their revenue, costs and liquidity on a monthly if not weekly or daily basis. They’ll be able to model and digest significant variations in activity and resources, as well as changes in operating models and growth scenarios. For those looking to scale up their operations, both from a size and geography point of view, these insights are invaluable. Expansion is an expensive business, so using the company’s data and connecting it to make more informed, accurate decisions will help ensure that they don’t burn through valuable capital.

It will also help them stay nimble. This is a period of significant change, with new regulations, political fluctuations affecting currency rates, access to skills and trade deals, amongst other things. The future is unclear so staying nimble means having a clear view and plan for what multiple futures could look like. That is only possible with a real-time overview of the business and the ability to quickly understand the impact of any market changes.

This is a critical point for fintech companies. The competition is growing and although the larger banks will never be able to match them in terms of agility, they have experience, big customer bases and money on their side. Taking a more connected approach to how they plan will be key to success. Only with a clear view of how the business is performing and scenarios for when that performance is jeopardised, will fintech companies cement their place in the future of finance.

Custom fit: getting the most out of your tech

The rate of innovation taking place today is enough to make any business feel permanently caught in a hamster wheel; trying to keep up with the latest trends to stay relevant. From small businesses to large enterprises, introducing anything new into a company can be a painful process. But if done right, it’s highly rewarding.

The problem is, the hamster wheel means that businesses feel constantly under pressure to move onto the next “big thing. There is a tendency for them to implement new technology and then quickly move on to the next project. Often, they’re then left feeling disappointed with the impact of that new piece of technology because just winding it up and expecting it to deliver isn’t enough. Businesses need to ensure that there is a dedicated team focusing on getting the most out of what is probably quite a significant investment. They need to consider the wider implications and success factors, such as people and processes.

Business need to look at how the technology will impact and benefit everyone, not just the IT team. It also needs to consider how it will integrate with existing workflows and procedures that are currently in place. Time is a luxury for today’s businesses so doing all of that whilst continuing with the day to day jobs can be difficult. Which is why working with a partner who can manage a project from start to finish and ensure that it delivers can be a game changer.

A new technology implementation is like a cycle race. Racing cyclists are decked out head to toe in the latest gear, accompanied by a highly technologically-advanced, custom-built bicycle built for precision and speed. The cyclist themselves are passionate and highly trained, knowledgeable about the course and the competition. They work together to be the best that they can be and to win the race. But without the rider, the bike is just a bike.

It’s the same in business. A company must be in the best shape possible, adapting processes and training people where needed to ensure that they can use new technology to its full advantage. Without that, the technology will sit there, having only the most basic impact or even no impact at all. For many businesses today, what they lack is time and skills – neither of which are easy to come by within existing internal teams.

In the pro peloton, the rider is supported by a group of team-mates and a huge support team, working tirelessly throughout the races to help achieve the best result possible. Building a long-term, working relationship with a partner, who has the skills and time to help the business through the entire journey of a new technology implementation is highly rewarding. By providing ongoing support, the partner can help the business start small, delivering immediate benefits, and then over time expanding the reach and impact of the investment to benefit other areas of the business. They are there to help figure out where to start, carrying out pilots to get an idea of any issues or unexpected benefits, from what the design and build should look like through to carrying out regular health-checks to ensure everything is working well.

It’s hard enough wading through all the technology solutions out there to find the best one, let alone achieving the promised benefits of the technology once you’ve invested in it. Businesses need to surround themselves with the best technology implementation partner possible to ensure that they’re reaping the rewards from their technology investments. As we know, in today’s digital age, technology can be the game changer for businesses looking to come out on top and win the race.

Planning is a relay race: here’s how to get ahead of the competition

“Connected Planning” is a term that has come to prominence in recent years, but as a philosophy it’s nothing new. James McKinsey’s 1922 breakthrough book ‘Budgetary Control’ effectively set out the connected planning roadmap used today. It focused on learnings for the future rather than simply reviewing the past and placed great importance on allowing managers to take control of their future business. All organizations try to join up their planning activity, and the role of connected planning is to manage this process and make these links as seamless as possible. I’ve come to see planning as a relay race with multiple handoffs – working as a team and smooth exchanges are vital to success. But problems surface when businesses use siloed systems which slow down this process and cause a breakdown in communication.

When implemented properly at both a technological and an organizational level, connected planning provides an intuitive map of how decisions ripple through an entire organization. Streamlining this process can lead to significant competitive advantages. Of course, each business and sector will face its own challenges. On one hand, consider a fintech startup that’s moving and developing at pace. It almost needs to reinvent its planning process at every new cycle. On the other hand, think of some of the world’s largest companies where planning processes are more firmly entrenched. The sheer scale of their operations and the swathes of data and activity streams involved can make it very difficult to implement this intelligence.

I’d like to address the practical steps that businesses of all shapes and sizes can take, to build a workable framework. So, here are my top tips for how every business, big and small, can succeed in connected planning:

Get to the spine of the planning process

Connected planning can seem complex in the beginning. From inception to completion there will be many moving parts along the way. Like the relay, every section of the process is important. However, trying to do everything at once may cloud your view of the real backbone running through the process. Working out the path of least resistance will be critical. A great place to start is to ask yourself: What are my business objectives? Some will prioritise revenue management, for example, while others will look at workforce planning. Start from your ultimate goals and work backward to find out what really drives the process.

Think big, but make it manageable

You’re only going to realise the full potential of connected planning if you have that vision in the first place. Set a roadmap for how you’re going to get there in manageable steps, otherwise you will overwhelm yourself. Don’t try to do it all at once. Begin by focusing on the smaller challenges which would release the greatest immediate benefit and start there. Continually build, test and adjust as you go and progressively integrate connected planning into your business.

Put the tech into perspective

Technology is a wonderful tool, and is for the most part the reason why connected planning has become a reality. But technology on its own isn’t the answer: it’s only as good as the craftsman wielding it. Connected planning is all about the interaction between people and teams, without user buy-in and understanding, it simply won’t work. Focus on the people and the overarching governance of the process. Without proper care and attention, it will lie dormant and fail to deliver value.

Never stop improving

Planning isn’t a static process, with a simple beginning and end. If you’re starting out from a disjointed and siloed process, be prepared to go through some level of trial and error initially. It will take time and multiple iterations to get right. The important thing here is to keep an eye out for where you can make improvements.

Connected planning is about achieving Olympic level smoothness through the baton changes. But the benefits of planning really come to life once the race is over and leaders can take a step back, analyse the results and find out which part of the process made all the difference. Relish that winning feeling, but learn how to improve and replicate it over and over again.

More data is a good thing, so let’s share

‍The growth in data has become an asset for teams working in the Business Intelligence and analytics space. However, the full benefits that data can bring have all too often failed to make their way across the entire organization.

Telling the data story

The importance of data is rooted in its ability to tell a story. Whether this is explaining customer shopping habitssales channel performance, or any number of other variables, the art lies in transforming this vast amount of data into a simple to use, easily interpreted flow of information. The capacity to identify new opportunities is amplified when this raw information is made available to a variety of teams, each with the freedom to explore it in their own way. By locking data for the exclusive use of those in highly analytical roles, you are restricting the entire organization’s capacity for creativity and potential new perspectives. Often the best data discoveries come when you don’t even know what you are looking for, until you find it. This is where planning and forecasting in cloud platforms really comes into its own, allowing businesses the flexibility to securely provide easy access to vital data, across the organization.

Data’s only half the story

Data is great but it’s what you do with it that really counts. The cloud gives organizations the flexibility to drill down and interrogate data and answer the questions that matter the most. For example, imagine a company that sells a wide range of products, to different target markets, across several regions. Cloud platforms allow you to build a tailored solution whereby sales managers can view data for their specific region, identify which products are selling the best, and compare their performance to that of their peers. They can then pivot this data to understand if this performance difference is because of their ability to over or under penetrate certain customer types.

From this raw data of sales figures, team members on the ground can extrapolate real business intelligence to improve performance. While this example is relatively simplistic, the impact of using data in this way only becomes more powerful as you add layers of complexity across the organization. By using the cloud, businesses can ensure that no matter how complex the data is, it can be controlled by the end user, in real-time. The right data, in the right hands, at the right time, is an incredibly powerful tool.

We know what we are selling but what does that mean for our business?

Through the application of connected planning it is now possible for teams to share their strategies with the collective and allow for a joined-up planning process. For example, a marketing team plan a summer campaign that they know will resonate well with a particular demographic of their customer base. The marketing team can flag this campaign to the salesforce via their connected planning tool. This update instantly filters through to the demand planning team who can model to understand the territories where they see greater concentrations of these customer types. They can then apply an adjustment to their forecast to account for the change in the market. This connected approach means that the process can be run in real-time anywhere in the world and the organization is better prepared to take advantage of gaps in the market quicker.

Business leaders must ensure that they are arming their sales and planning teams with the best possible tools to deliver results on the frontline. The benefits of connected planning are significant in the sales domain. By removing time-lags between decision making, planning teams are able to respond quicker to the demands of their industry. Accounting within demand plans for the actions of others, forecasting teams are able to resource to the correct levels and ensure demand is met. Using data in this way and connecting that planning process across the organization is the future of sales.

Five big tests facing your supply chain this year

We are living in interesting times. Europe seems to have turned a corner on the prevailing malaise and financial shocks of recent years. The emergence of Emmanuel Macron in France, who is once again championing a liberal and globalising attitude in Europe and the stability of Angela Merkel, suggests that this trend will continue.

In the UK and the US, however,  economic uncertainty as a result of the political climate  continues. Sterling in the UK has taken a knock and is driving inflation; in turn putting the breaks on consumer growth and squeezing spending. However, it is also driving the FTSE to new highs and could prove lucrative for UK manufacturers.

China is moving down the path of development and is more inward-looking.  As the US takes a more domestic-focused position, politically, China may step in to the breach and look to drive a more global agenda in areas such as climate change.

This context is highlighting some key challenges for functions across all sectors but in particular it raises some interesting considerations for supply and operations planning. The five big challenges for 2018 are:

1. External shocks from across the globe

Modern supply chains are increasingly global and involve chains of supply spanning multiple and disparate countries, as well as complex suppliers. More involvement means that organizations are exposed to a wider range of risks and external factors than before.

Large scale disasters such as hurricanes, earthquakes or geo-political instability in key supply markets will require significant mitigation efforts.

2. A squeeze on efficiency

Organizations will continue to face pressure to find efficiencies in supply chain costs. The move to online channels and new approaches to supply, along with recent low fuel prices, have provided opportunities for some organizations to significantly reduce costs. Even so, supply chain managers will remain under continued pressure to find cost savings. Once the big ticket items are gone it will be down to continued incremental cost reductions.

3. Speed to market

Uncertainty and the increasing pace of change means that companies need to have a real-time view of demand and a good understanding of the future direction of demand for their market. They then need to react quickly to these changes and pivot to meet the changing circumstances. At the same time, they are under pressure to communicate and obtain consensus from senior management and the market on the direction of travel, and they have to consider and manage logistics and inventory constraints.

The work to bring the demand and supply problem closer means integrating inputs across functions and developing an integrated planning process which can model the impact of changes across the related areas.

4. The exponential pace of change

As companies diversify and globalise their manufacturing base there is an increasing complexity in optimising the production process. The answers may vary not just by location but by time too. It’s important to consider that new product introductions could also mean moving into new markets, necessitating a new mix of production allocation across sites.

5. Customer expectations

For retailers, technology-led companies like Amazon and Uber, have shown the possibilities of true on-demand, seamless services. An Uber is a click away and in most cases you can expect next day delivery as standard. Other companies are having to respond and we have seen a rapid shift to next day or same day service.

This shift in expectations means companies will need to consider their markets and may need a fundamental change in their operating models.

From a planning perspective this means that we can expect to see continued improvements and collaboration between functions, with more real-time connected plans. Companies with siloed processes are not able to adjust quickly enough to capture the market opportunities.

In summary, what we are seeing is that the supply and operations planning processes will continue to integrate more closely across the business and become more integral to the overall strategy and direction of organizations. Companies who wish to remain nimble and efficient will move to a more frequent planning cycle and have the ability to model and report on changing market conditions and other external factors. At the same time, other functions like marketing, sales and logistics will provide regular inputs to ensure greater alignment and get closer to the customer.

Increasing scrutinity and reporting will be required from senior leadership and analysts to ensure effective communication and expectations setting externally, while also providing inputs to the continually moving strategy.

Budgeting 3.0: New Technology? Don’t sleepwalk into recreating the same old process – it’s time to create a new one!

Budgeting is budgeting, right?  A critical component of managing business performance, but invariably one where everyone breathes a sigh of relief once complete. “Phew! That’s that done for another year!  OK, well, maybe for another nine months as it takes three months to complete it each time.”  It’s a process which is annual, homogenous across the organization, time-consuming and dare I say, a distraction from the day job.

But is there really much that can or should be done to revitalise the process?  Organizations already have a range of different methods they can deploy to make it work for them.  They can choose zero-based or incremental, top-down or bottom-up and maybe even throw in some drivers.

Now, I’m not here to debate the relative merits of these concepts.  In fact part of my take on the subject is that these methods all invariably manifest themselves in the same type of process anyway.  Instead, I’m curious about whether people are really making the most of the technology they have at their disposal.  This is all prompted by the number of times I’ve seen people sleep-walking into recreating an old process in a new tool, under the illusion that it will all suddenly come good.

If you’re going to rethink elements of the process, then a good place to start is with clarity on what that process needs to achieve.  Ultimately it is there to set the baseline on which resources the organization wants to deploy over the near future, who has responsibility for these resources and what the organization hopes to achieve with them.  With that in mind, here are a couple of good process characteristics:

  • Robust: Not the most exciting of characteristics, but vital that the process delivers a result which is robust, comprehensive and trusted.
  • Agile: The process has to align with what the business needs out of it.  These demands can change over time or vary across the business, so the process needs to bend to fit accordingly.
  •  Owned: How you get to the answer can be as important as the answer itself.  If people are going to manage their element of performance within a budget, then they need to feel the ownership which comes from having created the budget in the first place.
  •  Tangible: Knowing, for example, that Cost Centre A is budgeting to spend £100k against Account Y, doesn’t give much insight.  Instead, the budget needs to capture exactly what that money is going to be spent on so that informed trade-offs can be made.
  • Integrated: The various pieces of the jigsaw really need to come together in a joined up effort.  Revenue/Margin, Staff Costs, Overheads, Capex, Project Budgets etc are all inter-related so can’t be developed in isolation.

Turning to how technology can help deliver on these characteristics, let’s first recap on the tools.  Without getting into a nostalgic review of what’s come and gone over the years, the recent story is actually quite straightforward.  There were the budgeting/forecasting tools of the early noughties, which one by one, were absorbed into mega-vendors and then put into stasis.  More recently an array of cloud-based technologies has been brought to market, each with their own value proposition. And then there is the ever-present Excel spreadsheet.  I’ve seen all of these deliver a similar process.  And I’ve lost count of the times I’ve come across the scenario where at face value the organization has a budgeting/forecasting tool, but in reality it is the place where the results get captured, once the offline working has been complete.

Amongst this mix of technologies, I don’t need to hide my affinity to Anaplan, which is a full modeling and connected planning platform in which many different data intensive processes can be realised, including budgeting, which is just one of them.  When it comes to budgeting though, Anaplan really can unlock new options for the process.  Here are some examples:

  • Keep it rolling: Doing a bottom up budget and then revisiting things during the year with a rolling forecast, isn’t a new idea.  But I like to turn it on its head, using Anaplan to deliver a rolling forecast into the hands of the business, which at the right time, gets baselined and used as an ‘envelope’ for the budget.
  • Cut to fit: Having a single homogenous approach to all elements of the cost base isn’t going to work.  Instead the process and the method should be tailored to each area of spend.  This isn’t just about more detail for bigger costs. Instead Anaplan enables different approaches for costs depending on whether the costs are centralised or federated, whether they are discretionary or committed, or whether they serve to ‘run-the-business’ or ‘grow-the-business’.
  • Understand consumption: Budgets are typically developed from the perspective of the area of the business where the resource sits; the ‘supply-side’.  A true understanding of the budget comes from understanding what is consuming the resources (projects, activities etc); the ‘demand-side’.  The most elegant approach is where an understanding of the consumption can tie back to business volumetrics which in turn can form the drivers of a rolling forecast.
  • Dust-off and go: The reality is that if you want a tangible budget where the consumption is understood, then things are going to have to get pretty detailed in parts.  You’ll be looking at line itemisation of some costs.  But this doesn’t have to be painful if you avoid starting afresh each time.  Building an Anaplan model which retains the catalogue of budget lines from one year to the next will help to achieve this.  It’s not about presenting to a cost centre manager, a view of ‘you budgeted for £50k in x last year’, but instead ‘you identified last year that your cost centre does these things and therefore needs these resources.’

I could identify more and more examples of new ways of working the process in Anaplan, but the point is probably made.  I should also suggest that it doesn’t have to be a case of ripping up and throwing away the current process.  There will be good practices which need to be retained, and perhaps also a phased introduction of new ideas rather than a big bang.

In conclusion, the next time you find yourself thinking ‘I would be great if we could do things differently, but there isn’t much room to move,’ then think again.  Likewise, if the thinking is ‘We’re going to buy and implement some new technology but not really revisit the underlying process,’ then again, challenge that notion!

Vuealta: Our Ambition

Having launched Anaplan to the UK market in 2011, it’s still amazing to see the phenomenal growth the business has had.  There is no question that the Anaplan technology is amazing and best-in-class, but the fast and global widespread adoption that we have seen is simply unprecedented.  I know I am biased, but having led the Anaplan UK organization for the last six years, and witnessing the demand out there at all levels in the market, I had no choice but to form Vuealta and strive for Anaplan Excellence!

One thing that has remained constant over recent years is that you don’t necessarily have to start big with Anaplan.  Many customers start with a small pre-defined use case or business planning problem.  Our mantra has very much been to get you up and running, adding value to your process in days and weeks, not months and years.  This is as true today as it was six years ago, but what has amazed me, is the reach and growth within organizations once they start to understand the power of a connected enterprise planning environment.

Understanding the impact of sales, marketing, product, human capital and operational decisions in real-time, is game changing for organizations.  The ability to crystal ball gaze and understand outcomes in the decision-making process directly effects the bottom line and confidence in which businesses operate.  I recall running companies in the past and only discovering issues once the FD had produced the monthly accounts. With Anaplan and its integrated financial planning capabilities, I know what’s going on in real time and can course correct ‘on the fly’.  If I have revenue targets around my Professional Services function but my Recruitment Planning model tells me we are behind on our recruitment funnel, I can instantly make changes.  If I am looking at making an acquisition, I can load the target’s data into my operating model and see what the combined business looks like across a range of scenarios.  If I want to know the impact of launching a new product or service I can test the scenario and visualise the impact.   It is literally possible to run any business planning scenario and you can head into a decision with absolute confidence of the outcome.

Vuealta can not only help you start your Anaplan journey, but we can grow with you as a true business partner and take the solution wherever you would like to go.  Whether you are a small team in a departmental area of your organization or you are mature in your use of Anaplan and want to ‘industrialise’ it by building a Centre of Excellence, we can help.

Vuealta has the best and brightest talent and we would love to work with you to embrace the amazing opportunity that Anaplan can bring your organizations.  Get in touch today!