Like Marmite or not, and I do, the current news from Unilever, the makers of Marmite, has a message for all of us involved the planning, budgeting and forecasting right now. They, like many organisations around the world are seeing fast rising raw material, wage and energy costs. As a result, they are stating they will increase prices again in 2022. Please note that I have NOT planned, budgeted or forecasted to stockpile Marmite as a result!
With all these fast-moving cost pressures the question is how quickly can you determine the financial consequences of the changes taking place and, where appropriate, make the necessary adjustments to pricing, products, packaging or distribution?
This is where the case for a truly ‘connected’ enterprise planning ecosystem can be seen and where organisations who have put such an ecosystem on place will win out. With the low inflation, good supply and low interest rates that organisations have become accustomed to since the 2008 banking crisis there has been some room for lethargy in planning, budgeting and forecasting systems. Even during the height of the pandemic organisations could deal more easily with falling demand by just turning activity off.
As we come out of the worst of the pandemic and activity is increasing organisations must now focus on ensuring every sale delivers the return they need. This means that reflecting the true costs in any financial plan, budget or forecast is essential. To do this the detailed plans for sales, manufacturing, distribution and workforce need to be kept constantly up to date with both the cost today but also those for the future. But, to see the overall picture each of these plans must be connected to the financial plan in such a way that changes in the detail can be reflected in the overall plan quickly and efficiently. It is only in this way organisations can ensure they are meeting their goals in the fast-moving cost environment of 2022 and beyond.
So ‘connection’ will be the key to an organisation’s ability to respond to the rate of change expected. This will not be achieved with processes connected by large amounts on manual manipulation of data and certainly not by using spreadsheets. Connections need to be automatic, accurate, fast and on-demand so that changes in input costs like raw materials, labour or energy flow very quickly to revised P&L, cash flow and balance sheet statements for decision makers to review and take action on.
So, what computer applications and systems should organisations be looking to for help and solutions to these requirements? There is no doubt Cloud solutions have much to offer from a cost effective and speed to implement point of view. I do not think this can or would be contested. Looking to Cloud for solutions is a given. Where the difference will be most felt is just how ‘connected’ the processes within the solution are and just how easy other processes can be ‘connected’ with good integration functionality and tools.
Our strategic partner Oracle have put together a great document with their thoughts on the subject of ‘Connected Enterprise Planning’ which is worth a read as it sets out in more detail much of what I have been talking about here.
Over a number of years we have worked with organisations that have ‘connected’ their planning processes with our help. They have achieved considerable benefits from adopting this connected approach. One great example is Edrington UK who were kind enough to agree to share their story of success in a case study which you can read HERE.
If you would like to hear more or just engage in discussion with me on this subject then please do reach out to me via LinkedIn or the contact page on our website HERE.
Until next time.