It’s been quite a ride! From crisis-management mode amidst the panic of 12 months ago to an upsurge of potentially unrealistic optimism as thoughts turn to recovery. The challenge that now faces every FD or CFO is the task of managing expectations whilst charting a course through continuing uncertainty.

Keeping it real

Pressure from shareholders and stakeholders often forces leaders to produce unrealistic budgets and plans. The fact that the forecasts and budgets prepared in 2019 had been completely shredded by the end of Q1 2020 is making it even harder to demonstrate you’re in total control and keep people confident in the course you’re planning.

With the CEO focusing on the big picture narrative, the responsibility for ensuring that the underlying facts are representative of reality falls to finance leaders.

Balancing act

2021 business plans will be trying to find a balance between pessimistic views of the ongoing impact of the pandemic and Brexit, and the emerging optimism that a vaccine-driven ‘bounce back’ will drive rapid recovery.

It is possible to counter uncertainty amongst shareholders and stakeholders but to do so every number needs to be evidenced for credibility. Robust data and intelligent interpretation of the dynamics of the underlying drivers are essential for FP&A.

Additional prerequisites for success are the running of worst- and best-case scenarios and reaching a realistic consensus amongst the leadership team.

Valuable insight

If these uncertain conditions are to continue – as they surely shall – then a central, single version of the truth is required to drive effective and profitable decision making. The most reliable way to maintain this data point is through carrying out continuous forecasting.

With immediate access to the bigger picture and freed from spending all your time just wrestling with the numbers, you will be in a position to support your leadership colleagues with valuable insight. Your organisation will be better prepared for and enabled to respond to emerging threats if you have access to information that can actually power decision making.

The role of FD or CFO is increasingly pivotal to any company’s ability to respond to the ongoing situation. One thing that we can be sure of is that in 2021 (and beyond), new opportunities and adversities are going to continue to emerge. To be able to seize or overcome these scenarios, your FP&A activity needs to be fit, agile and powerful enough to serve your needs.

We’ve talked before about how costly it would be to let your FP&A lag behind, with IBM’s Planning Analytics on Demand, businesses of all sizes can ensure that their FD or CFO has access to valuable insight that could mean the difference between recovery and stasis.

Get in touch today to see the difference Planning Analytics could be making to your FP&A provision.

The great thing about working with Spitfire Analytics is their financial background.  We can just explain what we need in our own terms and they understand exactly what needs to be done.

- Phil Talbot, Finance Director, Robertson Group

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The Path to Powering Profitable Decision-Making Reporting on the past, getting a grasp on current performance – or creating insights to drive a more profitable future. Read more