Struggling to Achieve Company Goals? Connect Your Siloed Planning Processes
We all know that in today’s hyperconnected, ecosystem-driven business environment, no one succeeds as an island. Modern supply chains are the perfect example of the interdependence of businesses on organizations beyond their enterprise. They are extended now – and getting more layered and interconnected every day. Disconnects in your extended supply chain can literally bring your business to a halt.
But the same is true when it comes to internal business planning. It’s not uncommon for the various functions across an organization to act like islands, planning in their departmental silos like they are not dependent on all the other functions of the business to operate and deliver on those plans. Everything happens in separate planning tools and stand-alone spreadsheets, without insight into how plans may impact one another.
This failure to connect planning processes can result in poor results and unprofitable decisions. At the same time, siloed planning processes often contradict one another and cause confusion and misalignment across departments. No one can answer basic questions – for instance, if the sales organization exceeds its targets, will the production team be ready? Will the right staff be in place? Can suppliers deliver the new demand? Is the company growing profitably?
So, what’s a business leader like you to do?
As explored in a new paper from SAP, your business’s success or failure is ultimately determined by its ability to plan and execute its strategic plans effectively. So, it’s imperative that your people and plans align across your business functions so that everyone is working in lockstep toward the same ultimate objectives.
This requires going beyond the boundaries of traditional financial planning and analysis (FP&A) to extended planning and analysis (xP&A) that links multiple planning processes and capabilities into a connected, enterprise-wide planning approach. Note that the “x” is not a variable that stands for any one department, such as sales, supply chain, or HR. Rather, xP&A refers to connecting siloed planning activities and plans between finance and every other department.
By connecting financial planning and analysis to different business dimensions, you can enable a smooth, end-to-end planning experience that bridges the traditional barriers between finance and operations and connects strategic, financial, and operational plans.
And the benefits are real.
For example, it allows your business to react quickly when something unexpected occurs. When one aspect of a plan changes, the other processes are informed and can quickly adapt – and the ship can stay on course. It also ensures that there’s alignment of operational business activities with your financial and strategic goals and objectives. This helps your CFO, finance teams, P&L owners, and operational leaders forecast, monitor, and evaluate plans holistically – and excel in their roles as strategic advisors to the business. Finally, xP&A helps you improve visibility and become much more agile and adaptable. When inevitable disruptions to your plans occur, you can make informed and financially responsible decisions. This has never been more important than right now, when continuous change is the new normal and the ability to pivot quickly isn’t just a “nice to have” but a necessity.
If this sounds familiar, you’re not alone.
The concept of expanding FP&A beyond finance has been practiced at some companies for several years under names like connected planning, integrated planning, collaborative enterprise planning, and company-wide planning. But because most planning solutions are still siloed, it’s been difficult to execute without a lot of extra work.
That’s why SAP is integrating its planning solutions for finance, sales, marketing, HR, procurement, supply chain, and more. Imagine having enterprise-wide data sharing across these areas and supporting planning processes both horizontally and vertically across silos, as well as embedding AI and machine learning into our solutions to harmonize data across all data estates. This will give decision-makers – and especially finance – everything needed to make fast, informed, and data-driven decisions.
Want to learn more about the future of xP&A with SAP? Download the paper, “Extend the Power of Financial Planning and Analysis: An Enterprise-Wide Approach.”
SAP is helping customers become more agile with xP&A capabilities. Explore extended planning and analysis solutions from SAP, today!