SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
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SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
Register now here
By Diana Groschupp, Vice President FP&A Europe at TD Synnex
When the world stopped running due to the COVID pandemic, companies had to reorient quickly and understand ‘on the fly’ how the new situation was impacting their activities and how to act to protect the business and employees.
There were many extremes. Some industries were put on hold (like travel, entertainment, gastronomy, etc.) while others flourished and expanded (technology sector, delivery services, biotechnology, pharma, etc.).
But the risk mitigation plans and Scenario Planning of possible future trends were needed for all the above options. It also became very quickly clear that the COVID pandemic was speeding up the adoption of digital technologies and was strongly transforming business in all industries, setting the trends for the future.
The pandemic showed that technology is an important social and economic element. For instance, during the pandemic, it:
Having a short flashback, let’s remember some facts with which we all were dealing as the managers and FP&A leads:
Looking back and talking to colleagues, we can say that in most cases, our teams and we managed to navigate through all these complexities, still delivering up to expectations and providing strong FP&A support to the organisations.
But what was the road map of this journey?
There were three main phases of the FP&A dynamics observed during the pandemic period, which I can summarise as outlined below:
Understanding the market environment and validating possible impacts on the organisation were crucial for a quick reaction to new requests and needs. E. g., during the pandemic, we observed the difference in time of hitting the countries and related legal and sanitary rules changes. Analysis of such a situation allowed us to prepare accordingly upfront for some activities in the countries that might be hit next.
Supply chain status validation was important for understanding how our business activities could be impacted in the upcoming weeks.
The key tasks were as follows:
In such a critical situation, the speed of sharing the business status and trends became extremely important. For sure, there were cases when the data sources were not set up perfectly in this phase. The design also needed to be more sophisticated. But what really mattered at this stage was the speed and availability of info, with the selected focus on the critical elements of the business.
Settling the activities to the new way of working period.
This phase is characterised by the reworking, improving, and stabilising of the processes and analytics, which were put in place quickly in the first phase. During this time, the usual perfectionism of FP&A teams came into play with deep validation of data accuracy and improvements in the data flows and systems connections from the first phase. There were needs raised for digital transformation, and as one of the consequences, many companies implemented new planning and analytics tools.
It helped to stabilise the working processes, e.g., to understand better how the pandemic impacts the P&L and working capital. Such analytics allowed more accurate Scenario Planning and validation of different business implications.
Not normal from the first phase was stabilised and improved, becoming normal. We also learned the key criteria for the quick move into this phase, which was, for sure, very helpful for the future.
Building the platform for solid business support, resilience, and agility of the function in the new and quickly changing environment.
The pandemic taught us that any crisis could come unexpectedly and suddenly. It also gave us the key lessons on how to react and what was needed to ensure that the 1st phase of managing emergencies is as short as possible. We also learned how the organisation could quickly move into the ‘Normal of not normal’ management mode.
The key checkpoints for this phase are as follows:
1. Solid technical knowledge – to set up new analytics and reports quickly.
2. Reliable Finance knowledge – to understand the P&L, BS and important KPIs status.
3. Strong analytical skills – to properly validate the situation and its impacts on the organisation and provide meaningful planning scenarios design.
4. Communication skills –to allow stronger cooperation and information exchange between different departments.
5. Good business understanding – to support the activities in place, validate the risks and opportunities, and become the reference point for insights and data understanding.
Consider flexibility as standard. The changing environment requires changing both focus and approach in analytics, processes, and data. Prepare your teams that the changes are necessary and normal. By setting up the processes and analytics, there should already be the mindset for possible quick updates. It means – the base, the systems, and the data alignment should be in place.
The pandemic showed us how quickly the world can change. It taught us to adapt and to react ‘on the fly’. It showed us that there is no stable constant. We know now that uncertainty is the only certainty to come, and the only way to get stability into this uncertainty is to ensure that we are prepared for changes at a high speed.
The new norm is the solidly settled agility and the strength of resilience: in processes, data, tools and mindset.
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