To compete in today’s fast-changing business environment, companies need competitive strategies. And competitive strategies are supported by robust planning. Formulating those plans was the number-one enterprise “ask” from finance, according to The Hackett Group 2017 Key Issues study.

CFOs who stand by their CEO’s side as strategic partners have FP&A teams with top planning capabilities. Our research shows that 54% of world-class finance organizations already fully integrate the financial and strategic planning processes.

It’s critical that the planning process works right. But how can you tell when it doesn’t? Here are three big red flags:

  • It takes too long. That may be because it takes too many days to collect the necessary information and put it together. Or it may be because each phase includes so many iterations that not only stretch the timeline but dilute the outcome. Plus, FP&A may be looking at too many items: world-class finance teams include 25% fewer items in the budget.
  • It doesn’t happen frequently enough. The world is moving too fast for plans to be created and put in a drawer. And forecasts need to be updated dynamically so that changes in the marketplace can be quickly incorporated into the company’s investment strategy. If the plan is created once a year and the forecast 12-month/static, something is wrong. The forecast is likely to lose relevance fast.
  • It’s predominantly handled with spreadsheets. Finance automation is the key to so many world-class performance metrics. Without it, every process is either broken or will soon break. While the percentage of finance organizations currently using predictive analytics tools remains small (but forecast to grow five-fold), over 84% of EPM organizations are either moving or looking to move to the cloud. A dedicated planning solution that can automate routine reports, pull data from multiple sources, and support some level of analytics is a must.

What can CFOs do to improve?

While things may need to be fixed, there’s a lot CFOs can do to bring about the necessary change:

  • CFOs must think of themselves as chief customer officers; their role is to provide the best planning services to their internal stakeholders. They need to drive their teams to deliver actionable information and insight that help make the right decisions.
  • CFOs must become the champions of any effort to move the planning process onto a dedicated technology platform. They must also survey the technology market for new solutions that can speed up or improve the quality of the service they offer. Big data and predictive analytics can greatly enhance the quality of the forecasting process. Robotic process automation (RPA) can help plug gaps in between systems, even if temporarily.
  • It’s also the CFO’s job to become chief change manager and push staff to do things in new ways. That means feeling comfortable with less than 100% information (reducing the number of items forecasted or budgeted). CFOs need to oversee the switch from static to dynamic planning, using rolling forecasting and keeping the “bank” open all year; resources need to be reallocated as needed as new trends emerge and competitors change directions.

It’s never been more important for CFOs and their teams to provide the right planning services to their internal customers. The digitally altered business landscape is characterized by fierce competition and disruptive technologies. To stay relevant, finance organizations need to improve the way they plan. They must plan faster, more frequently and leverage technology in smart ways.