Strategic planning is a vital activity for any business. Not having a clear understanding of the opportunities and challenges that lie ahead is akin to driving at night with your headlights off.
The way in which this planning is undertaken is also critical. Rather than being an annual process that sets goals and actions for the year ahead, it needs to be an ongoing activity that is continuously revised to match changes in customer demands and market conditions.
The need for such agile planning has been brought into stark relief by the COVID-19 pandemic. No business in the world could have foreseen the disruption it has caused or made allowances for the long-term impact. Any annual plans set in January are now essentially works of fiction.
Louise O’Byrne, Finance Transformation and Strategy Manager at Sydney Airport Corporation, says the virus completely changed the playing field for her organisation with virtually no warning.
“Typically, we are a business with four revenue-generating streams that historically have been very stable,” she says. “They are our aeronautical business, our retail business, property and land operations. The virus put us in a situation where each of our businesses was disrupted in a severe way.”
Faced with such disruption, the ability to undertake agile planning is not just a nice-to-have capability; it’s something that could mean the difference between a business continuing to function or closing its doors.
“The COVID crisis has really emphasised the need for collaboration across teams,” says O’Byrne, a speaker at Board’s virtual conference, Defining the New Normal: Accelerate Decision Making through Digital Transformation. “The importance of having accessibility to data in a responsive way was clear all the way to the C-suite.”
"The COVID crisis has really emphasised the need for collaboration across teams.”
The ability to undertake agile or accelerated decision-making relies on having access to core data. For plans to accurately reflect current conditions, they need to be based on the most up-to-date and reliable data available.
Challengingly, it is highly likely that the data required to support accelerated decision-making won’t be available in a single location. It will have to be drawn from different parts of the business as well as from external sources such as suppliers, partners and customers.
This is particularly important when things are changing so quickly and unexpectedly. For example, during the past few months, businesses such as supermarkets and hardware stores have experienced a spike in trade. However, this has come at a time when others, such as restaurants and bars, have watched their takings fall off a cliff. Tracking data about customer demand and supply chain performance has never been more important.
Accessing quality data
To make decisions and plan in these conditions, however, a business needs more than just data. It also must have in place tools that will allow it to make sense of that data and use it as the basis for informed decisions.
“Within our clients, there was a lot of interest in digital decision-making prior to the pandemic,” says KPMG Manager of Financial Strategy and Performance Consulting, Georgina Woolf, another Board virtual event speaker. “Now it’s moved from being an interest into prioritising a transformation.”
Woolf says her firm’s clients want to be able to make decisions more quickly and have them based on reliable information. They also want strategic planning to shift from something that’s undertaken once a year to an ongoing process that can respond to changes in business conditions.
This process is streamlined by having in place tools that allow different data sources to be brought together to create what is termed a ‘single version of the truth’. This gives managers and decision-makers the confidence the data they are viewing is as current as possible and reflects the very latest impact of changing conditions.
The tools can also help to represent data is different ways. Rather than needing to comb through multiple spreadsheets, data can be displayed on digital dashboards that enable trends to be spotted quickly and easily.
What-if scenarios can also be readily tested. Managers can determine what the impact of closing a portion of operations would be, or how the continuation of government support such as JobKeeper will affect ongoing profitability.
Rapidly changing external conditions can also be swiftly taken into account during planning.
For example, sudden viral outbreaks in one area could mean that strategies need to be changed essentially in real-time. Having both accurate data and powerful tools to analyse it in place will ensure the business can react as quickly as is required.
Ready for the future
As the world emerges from the COVID-19 crisis, it’s clear that conditions are going to be very different for a very long time. Business strategies that made sense in late 2019 and early 2020 are likely to be significantly different and require capital and human resources to be deployed in new ways.
Trent Fuller, Chief Financial Officer and Director at Followmont Transport, says having access to quality data and the ability to extract value from it will continue to be critical for his company. “We need to know that, if revenue is down, where this is happening and with which customers so we can adjust accordingly,” he says.
“We need to know that, if revenue is down, where this is happening and with which customers so we can adjust accordingly.”
“There’s also the forecasting element – not just waiting for the annual budget but being able to forecast on the fly and make decisions is critical.”
Those businesses that have this capability will be best placed to thrive as Australia, and the world, embarks on the long road to recovery.
*This story was originally published on consultancy.com.au.
Board International’s on-demand event
Defining the New Normal: Accelerate Decision Making through Digital Transformation features expert sessions, real-life case studies, and interactive workshops on how to accelerate digital transformation by connecting planning, analysis, simulation and forecasting business-wide. To see the event, head to https://on.board.com/2QITCxN