Moving target: What it takes for annual planning to hit the mark
In this issue of CFO Insights, we will discuss the elements that go into creating a plan of action and additional steps finance chiefs can take to ensure a future-ready plan.
As finance leaders prepare to embark on the annual planning process, they may want to push a new issue to the top of their agendas: the annual planning process.
The unprecedented events of recent months—the COVID-19 pandemic that few, if any, corporate financial plans foresaw—have clarified the need for infusing the conventional planning process with greater agility. As many CFOs have likely learned, businesses need the capability to revise their plans and adjust their assumptions to accommodate the impact of real-world events.
Moreover, the multitude of overlapping issues clearly demands a different approach. At a time of economic instability, organizations face a steadily rising number of additional challenges including: constant scenario development and modeling, lack of confidence in future projections, the urgent need for decisions about courses of action, an unclear decision-making framework, particularly around capital allocation, and time-and-resource-consuming manual iteration.
Complicating matters, many CFOs are still in survival mode. In fact, in the Q2 2020 CFO SignalsTM survey, finance chiefs say their management teams are more focused on ensuring viability and adapting for near-term performance than on evolving their company for success post-crisis. Still, the planning process will kick off for many in the next few weeks or months. In this issue of CFO Insights, we will discuss the elements that go into creating a plan of action and additional steps finance chiefs can take to ensure a future-ready plan.
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