Faster results or better results? What will you have in 2025?

A couple of things we’ve been meaning to talk to you about

When it comes to technology, it’s all too easy to carry forward unchallenged assumptions. We all do it. Sometimes because it’s easier, other times because we genuinely don’t know what we don’t know.

So, there are two things we want to talk to you about. First, why old ideas don’t always stand the test of time. And second, why it doesn’t pay to assume how much something will cost and dismiss it offhand?  

Starting with the old ways. “If I had asked people what they wanted, they would have said faster horses.” ~ Henry Ford.

While this is a great sound bite and a popular quote, Henry Ford DIDN’T actually say this. But it does make a good point. It takes considerable imagination to envisage improvement outside of what you already know – especially if you’ve never seen a car. So, in the context of your financial business processes, falling back on using automation to deliver faster results – rather than better results – is understandable.

A simple example is a finance team member tasked with the weekly chore of cutting and pasting budget data from an assortment of applications into Excel and then emailing it to their boss. This takes 4 hours a week, or 12 hours per budget cycle.

You could look at this as a time-saving exercise and ask, “How can we speed up the cut-and-paste process?” But what if, instead, you enable the boss to directly access the required information with the click of a button? This way, there’s no reliance on another team member (who could easily be away on leave or sick).

While automation can be used to significantly reduce the need for manual input by streamlining old processes, what’s even better is that it can transform the process and outcome by taking a technology-driven approach.  

Now, let’s talk about affordability - or the assumption that you can’t afford a forecasting and planning system. Maybe when you last looked at rolling out a new system, it was on-premises, and the price for 60 users was jaw-dropping. But times have moved on. Cloud-based solutions are considerably more affordable; some vendors even offer cutdown versions.

And the old, expensive ‘all-or-nothing’ approach is no longer considered best practice.

Instead of adopting a big-bang solution strategy, you can roll out a pilot project which addresses your most pressing needs to a sample user base. Then, you can ensure that the value added to your business is what’s expected (and the system is fit for purpose) before adopting en masse. The initial investment is much smaller, and the ROI can be proven before a full rollout. And the cost reality can be a pleasant surprise – not an unfounded assumption.

Is a new ERP really the best answer to better reporting?

If you’re at the stage where it’s obvious your ERP isn’t delivering the reporting your team needs, it’s tempting to think about replacing it. But we’d like to say, ‘Hold up, a new ERP may not automatically solve your issues.’

ERPs were essentially designed to capture transactions – not deliver the in-depth, customised, ad-hoc reporting modern businesses need. While your ERP may not need to be a Rolls Royce, it does need to provide visibility of and access to your data, preferably without adding report writer functionality or upgrading your solution. While you ‘can’ use the ERP as a report writer, it will never be the right tool for the job. Just as you could type an entire novel into Excel, you shouldn’t bother when much better tools are available. Yet, we see businesses that persist in using the software they have (or, even worse, Excel) simply because they have it and know it. Not because it makes a good, accurate, or easy job of it.  

So, what should you do?

Start with a robust planning/forecasting solution and an integration plan. Systems integration not only makes your budget go further but allows you to dramatically improve outcomes using your existing ERP. And should you upgrade further down the track, that’s not a problem. With an interoperability approach, your integration will move to your new ERP with little stress or additional cost.

(What’s interoperability? Glad you asked. Interoperability means that not only are your solutions connected so they can freely exchange information - but they can work together without any effort from your end. In effect, they not only talk to one another but speak the same language without needing an interpreter.)

Modern planning/forecasting applications are designed to handle multiple connections. In some instances, we’ve united up to 200 data sources. So, at times, it makes little sense to upgrade when you can integrate to achieve a single view of your enterprise data and generate the reporting you need – pulling in siloed data from other line-of-business applications like production databases, marketing platforms, HR systems, and more.  

Wherever your data is, we can connect it and bring it into a unified platform. And, suddenly, you and your users can access the information they want in the format they need. Additional reporting parameters can be added quickly without reinventing the wheel or making demands on your in-house programmers. Add user training to this single unified platform, and the right information is exposed to the right audience at decision time.

If you’re always under pressure to make your technology budget go further, and there are internal rumblings about existing systems which don’t deliver, systems integration enables significant improvements in reporting and data access. Without having to fork out for a new ERP until you’re good and ready.

Two things that will change your approach to forecasting and scenario planning

First, AI. Since 2015, there’s been considerable hype about AI and how it can do your forecasting for you. We’re glad to say that in 2024, the hype finally became a reality (and we’re deploying projects using proven AI-enabled tools).

What’s really exciting in the world of forecasting, though, is the use of AI for correlation detection. In plain language, correlation analysis is a statistical method that measures how closely two variables are related to each other. It helps you to understand the patterns and trends in your financial data (and even external factors) and their impact on your business performance and decisions.

For example, if you are a high-end retailer, you want to ensure you have sufficient stock for the year-end rush at the right stores, but not too much, due to expiration dates and limited storage. However, assuming it will be the same as last year may not be the best strategy. It can be helpful to understand how repeat customers behave and what products are typically bought together, as they can vary by region and store.

But if you’re manually juggling a 20,000-row spreadsheet to uncover patterns from the previous decade of data, best of luck! The good news is that AI will not only identify trends but also spot the correlation between sales to repeat customers and the latest trends in basket analysis. AI could, for example, point out that every time you sold item X to an existing customer during the previous festive seasons, they returned for more the following year. And that items A and C are frequently sold together in Region 1, but items A and D are most commonly sold together in Region 2. So armed with this knowledge, you’re ready to drive sales.  

AI can also overlay external information. For instance, if you own a DIY chain, adding weather forecasts to shopfloor planning will ensure you’re well-stocked with BBQs in sunny regions but gutter-clearing gear in another. Thanks to AI, you can finetune your displays and purchasing plans – and boost sales.

Next is using scenario planning to create multiple versions of the future. Then deciding which one you want to work towards.

While you may just want to maintain BAU, your plan may not consider a competitor opening next door, seven key personnel departing, or a legislative change to the number of working (i.e. chargeable) hours. With scenario planning, you can prepare for multiple eventualities.

Scenario planning allows you to factor in those challenges and present a range of viable scenarios to pivot or expand. All invaluable if you’re asking your bank or investors for funding as you can create best, worst and likely case versions to further reduce risk. Like to hire another 200 people? Calculate the onboarding costs, salaries, and extra revenue generated. Targeting a new online market? Predict the value of the opportunity and what you need to make it happen – and the potential ROI to generate further investment.