As we look ahead to the end of Britain’s second lockdown period next week, there’s still uncertainty about what restrictions will be in place in the near future.
The positive note is that economic forecasts suggest the impact of the current lockdown has been relatively mild, with GDP falling 2% for the final quarter of 2020. The strong progress with developing a vaccine also bodes well for mid-term economic recovery.
We can’t ignore the UK’s looming departure from the EU when Brexit finally happens in January. KPMG predict that the economy is unlikely to recover to pre-pandemic levels until the end of 2022. Their analysis suggests that Brexit could bring GDP growth down to 7.2% in 2021, with certain manufacturing sectors showing output 6–12% lower at the end of 2021 than Q4 of 2019.
This will be down to supply chain bottlenecks, border and transportation issues – we’re already hearing lots about problems at ports – and falling investment, combined with the ongoing repercussions of the pandemic.
Oh, and although the extension of the furlough scheme has temporarily protected the unemployment rate, we can surely expect to see a sharp rise in those figures next year once it’s withdrawn and businesses can’t maintain their staffing levels without the government support.
Yael Selfin, chief economist at KPMG UK, said:
“While we can hopefully see the light at the end of the tunnel when it comes to the Covid-19 pandemic, there are further challenges ahead for the UK economy. Brexit and changes to working, communicating, and shopping habits reinforced by the pandemic will require all of us to adjust to new realities.”
How do you plan for what you can’t see?
These are just the known factors ahead of us. Given that it’s little over a year since the first recorded case of COVID-19 and in early March we weren’t even considering the 3 month lockdown we entered 3 weeks later, does anyone want to predict what the ‘new realities’ will be by April?
We’ve talked before about planning effectively in volatile business conditions with a focus on fluidity, agility and asking questions. Over this uncertain year we’ve seen businesses start to adapt to the greater planning demands they face. The upshot of this is internal change that has to be accounted for.
Change can be painful
In itself, this change is generally a positive, but when operating purely in spreadsheet models, change management becomes a difficult and potentially risky process. Talking about Robertson’s own experience of trying to implement upgrades, FD Phil Talbot said:
“Obviously, enhancing and improving the spreadsheets was always quite challenging because you had to harvest from the 60 or so individual contracts to the spreadsheets, make changes 60 times and then feed the spreadsheets back. The data within the spreadsheets could only be seen for that contract, so consolidation was impossible – It just wasn’t practical”
This is a business-specific example, but the experience will apply for any organisation reliant on a spreadsheet-based system. When any alterations in structure cause pain due to the manual complexity of updating across your system, your organisation is not going to be well-equipped for proactive behaviour in volatile conditions.
Information to drive insight
Your FP&A team are already facing increasing workloads, gathering data shouldn’t be taking up their valuable time. Your business is going to be asking a lot of ‘what if?’ questions for the foreseeable future, equip your FP&A team to provide the answers you need to withstand the turbulence of the coming months. With the solid foundation of automated processes within the Planning Analytics system, your finance function concentrate on delivering insight and value rather than number crunching.
Using this system will give you the capability to access the whole story behind your numbers and the time and opportunity to explore all avenues and refocus your activities with the answers to hand. IBM’s Planning Analytics on demand offering has opened this tool up to enterprises of all sizes. Take this opportunity to ask more questions and get in touch today to discover exactly how valuable Planning Analytics could be to you.