According to the World Bank, the economies of the Gulf Cooperation Council (GCC) are in a strong recovery phase. As recently as August, the organization’s Gulf Economic Update (GEU) projected aggregate growth of 2.2% for the region in 2021, citing past strategic investments in infrastructure and forward-thinking commitments to technologies such as 5G. In 2022 and beyond, the GEU foresees growth rates among individual GCC countries accelerating to between 2.5% and 5.3%.
To be a part of this post-pandemic success story, companies must be prepared for a highly competitive journey. In the digital age, we often fall for the meme that technology is everything. To a certain extent, that is true. But who pays for technology investments? Today, as in years gone by, in the background of all business decisions sits the warden of change – the finance department. It all boils down to finance.
Of course, in the digital era the finance department itself also relies on technology. Data and reporting capabilities can advise if marketing is generating enough leads, and whether the warehousing team is making efficient use of space. Or whether maintenance workers are making too many trips to customer sites and wasting fuel and resources. There are any number of real-time activities – revealed by data – that could impact revenue in the next quarter or the next year.
Planning for the unforeseen
Financial planning and analysis (FP&A) has long been the cornerstone of such insights and has underpinned strategic decision-making in project preparation, budgeting and a host of other areas. But now, thanks to the emergence of a range of technologies designed to address growing volumes of data, finance leaders can enable even better business performance with extended planning and analysis (xP&A). It provides the same capabilities as FP&A but goes further to increase collaboration between every department under a unified performance management approach. Up-to-the-minute, comprehensive, accurate, companywide plans enable better insights and better decisions.
Under the xP&A paradigm, departments can move and act more quickly and more precisely, significantly increasing their competitive edge. In the global digital economy, markets are more highly dynamic. Finance leaders need robust 360-degree planning to improve long-term performance and effectively serve the corporate vision.
xP&A can be thought of as accurately and continuously measuring the performance of multiple processes across the enterprise and detect trends and problems before they impact revenues and profitability. Upon implementation, planners in any department will experience real-time benefits.
A unified approach
xP&A supports more easily navigating uncertainty, as they are exposed to a single, central data foundation, and can see, in real time, the cross-discipline impacts of their actions. The identification of opportunities, the discovery of “white spots,” and the domino effects of strategy all come into focus. Leveraging these insights to make better decisions falls into place.
Data serves the finance function as never before with xP&A. It allows the building of more granular operational models. It is a platform for better planning, both inside and outside the finance function. It allows the road-testing of theories with invaluable scenario planning and scenario modelling. And at its heart lies the advanced technology behind machine learning, which delivers potent predictive forecasting.
Data silos have long been a stumbling block for digital transformation in general. The ability to eliminate data silos under xP&A provides significant value creation opportunities for all business units. But more importantly, the unification of decision-making processes across the enterprise now means that valuable data doesn’t sit untouched and can deliver better results.
Increasing agility
The xP&A approach empowers modern finance to drive a true transformation journey. Finance and operations function collaboratively, so strategic planning can occur alongside the financial planning. No one is in the dark on what’s happening anymore. With xP&A, options can be evaluated and executed more quickly, in a continuous planning loop that powers quicker and more efficient improvements in productivity, design, and more.
The path to increased agility means IT and finance should be guides on the journey that includes all decision makers. The xP&A model must be designed from the inside out, accounting for each business function as they will all be vital components in its success.
Such a project also comes with an understandable resistance. Why do we need this? These questions highlight the need for cross-departmental consultation at the planning stage and at every phase of the process. Project leaders from finance lead the way on this journey for other business units to gain buy-in and provide support that utilising xP&A means inconsistent planning and outdated forecasting are just not viable anymore to properly navigate uncertainty.
ERP, CRM, HR, and other core systems also seamlessly align with Extended Planning & Analysis. This leads to cost savings as companies can better plan for what technologies and tools they want to use. They also have the option to design their technology environment with a mix of environments and customisable modern infrastructure to meet modern data security requirements.
The year ahead calls for organisations to increase their competitive edge and enterprises that cannot move to the rhythm of fast-changing markets will fall by the wayside. And that is precisely what xP&A delivers – the right moves, at the right time.
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