In this ever-changing business environment, organizations need to adapt and act quickly. Making excellent strategy, execution, and planning is the key enabler of rapid and more informed decision-making. In the current scenario, the Financial planning and analysis (FP&A) professionals are dealing with the pressure to quickly report financial numbers. They need a solution that streamlines this process and enterprise performance management platforms offer just that. It provides easier access to financial insights to support decisions.
Anaplan for finance is one such solution for finance decision-makers. It offers a collaborative, dynamic, and intelligent platform that helps organizations to make more informed decisions, which leads to effective planning.
Anaplan’s cloud-based planning platform solves problems related to planning, forecasting, and reporting in areas like finance, operations, risk, actuary, and more. It is an adaptable and easy-to-use financial planning platform that enables your planning models that are custom-fit to your needs and business prerequisites.
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Significant Challenges Faced By The Finance Professionals
Presently, with the changing dynamics of the companies, finance professionals had to deal with the following set challenges:
• Digital interference is impacting the industry from different ends, resulting in both risk and opportunities. So, how businesses will derive profitable growth in this environment?
• Poor forecasts are a big challenge for any industry that usually occurs when collaborating inside a big organization. Finance teams need accurate forecasts for better budgeting and planning.
• Everyone wants to have real-time results and information. FP& teams are under severe pressure to deliver analyses to the decision-makers.
In the present scenario, all organizations across the industry are embracing new technologies like Artificial Intelligence and machine learning, and for that, Anaplan for finance offers a perfect planning environment that leverages AI and ML initiatives to support and provide more accurate forecasts to accelerate the process of decision making. Anaplan’s Connected planning approach is linked to market events and operational tactics, resulting in organizational transformation, associating financial plans to corporate objectives.
Anaplan’s Connected Financial Planning platform is driving value to companies of all sizes. With the growing adoption of technologies and their related platforms, the organisational landscape has grown very complex which leads to inefficiencies from collecting data across disparate source systems.
Enterprise spending on technology is now investing in a cloud-based planning platform system in the current scenario. With cloud planning, companies can replace legacy solutions and create new capabilities, as there are numerous financial solutions available in the cloud. The Anaplan financial planning platforms makes forecasting a dynamic and reliable performance management process. With Anaplan for finance, you can tentatively calculate the performance gaps between targets, forecast, analyze root causes, and enable effective decision-making.
Source: Anaplan
Planning, budgeting, and forecasting (PB&F) look entirely different with Anaplan financial planning software. With its cloud-native approach, you can automate and structure manuals, spreadsheet processes to jot down timely analysis, reports, and reliable plans. Anaplan for finance can deliver fast & flexible modeling and enterprise readiness to your finance department. Here are some highlights of the stand out features that Anaplan’s cloud financial planning and analysis platform offer:
• Anaplan’s business syntax modelling offers the financial analysts to create, revise, and maintain models without any assistance from the IT support
• Anaplan’s connected planning platform is a modern, secure architecture designed to satisfy the needs of business users and the IT department
• It helps you create timely and reliable forecasts by applying statistical algorithms to both historical data and external datasets
• The platform offers a planning environment that supports AI and ML initiatives for more accurate forecasts
• Anaplan links financial, sales, and operational plans together for ideal financial forecasting across your enterprise
• Anaplan for finance is turning to machine learning to support modern Finance functions
• By augmenting a cloud-based planning approach to financial planning, FP&A teams are equipped to continuously analyze business performance, adapt to fluctuating markets conditions, and foster an innovative business culture
Therefore, we can summarize that with Anaplan businesses will be ahead of the competitive curve and will gain better visibility on the financial performance of the enterprise. In this way, Anaplan for finance presents users with eclectic resources, technology, and builds a collaborative culture across your finance department.
There is a range of potential advantages to the zero-based budgeting approach. With the proper implementation, ZBB will enable your organization to
1. Challenge the status quo: Zero-based budgeting encourages the business to take a hard look at what’s working and what isn’t across various processes and business activities. Cost centres may be redefined and activities examined to ensure finances are allocated most effectively.
2. Reduce costs while increasing efficiency: ZBB encourages department heads to seek to be more efficient, so increasing workloads actively do not drive increased spending – effectively determining how to do more with less.
3. Maintain control over the budget: Unlike traditional budgeting, where many budget holders rollover or inflate the previous year’s budget without justifying why – ZBB encourages departments to review all aspects of their budget before submitting it. This gives greater control over budgets across the organization while potentially also helping to reduce inefficient spending.
4. Drive continuous improvement in activities: Instead of using previous budgets to form the basis of the next one, zero-based budgeting encourages managers to continually review their department’s activities and determine where improvements can be made.
5. Encourage initiative and agility: To meet the demands of zero-based budgeting, department heads will need to be creative, agile, and take responsibility.
Much has transformed in the business world, including operational practices, workplace cultures, and financial management technology. Check some of the best practices that organizations use to achieve success.
# Identify the quick wins
Typically, focus your zero-based budgeting initiative either on the larger and more stable business units toiling with profitability or selected overhead areas (such as sales, general, and administrative expenses) where high indirect costs are not clearly understood. Such choices will reinforce the rationale for undertaking ZBB, but they will also deliver the most considerable cost savings with minimal disruption to the rest of the organization.
# Build a culture of alignment and accountability.
As technology enables deeper visibility into what is driving costs and profits, organizations can use zero-based budgeting to align resources and investments more smoothly to strategic goals.
On the one hand, ZBB can shed light on opportunities for more strategic spending that have been overlooked or not considered worthy. According to the Harvard Business Review, one company used ZBB to determine that its commercial discount was higher than it needed to be—an expenditure that wasn’t being reviewed. Another company used ZBB to solve a challenge specific to its logistics costs: labour costs were non-negotiable, but through a ZBB exercise, the company identified a way to reduce costs through negotiations with freight providers.
ZBB also can help to change minds about how spending should be planned. Instead of annual budget planning being a rote process based on traditional spending, each expenditure is scrutinized for what it brings back to the company. The process embeds accountability into decisions.
# Choosing the right planning platform
The success of zero-based budgeting depends on having in-depth insight into the operational drivers of costs like productivity ratios, activity volumes, and input costs—none of which are contained in traditional planning and budgeting software. These older systems only involve highly clustered financial data and, as a consequence, require to be supplemented with substantial amounts of data from elsewhere, such as spreadsheets. Manipulating this data in ancillary spreadsheets increases the workload and complexity involved in any ZBB initiative.
A preferred alternative is to hold all the detailed financial and operational data on a single financial planning and analysis platform like- Anaplan. Such a platform makes it easy to model the causal relationship between activity volumes and the resulting resource needs. Additionally, Anaplan’s proprietary in-memory calculation engine provides the necessary power to process the large volumes of data involved.
It’s probably true that every company could benefit from at least trying ZBB. Especially with modern technology, zero-based budgeting enables more inclusive and informed decision-making about investments, and it helps participants be more accountable for their decisions. Get in touch with Analytics Depot Solutions to take a broad approach to more strategic and successful ZBB program results. Book a session now!
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