Containing the pandemic is the only priority for now, but better financial and operational planning will help organizations ride out the crisis and lead the recovery.
The only thing that is important at this writing is slowing or (hopefully) stopping the spread of COVID-19. Full stop. We are going to see a lost quarter (perhaps two) where business-as-usual is concerned. That’s okay. Keeping people safe is what matters.
Among the many technologies in my “data-to-decisions” (D2D) research domain, some will play key roles in finding solutions to this public health crisis. Federal, state and local leaders and health officials are using analytics and data science every day to track the outbreak, forecast what’s ahead and drive better public health decisions. In the labs of the CDC, other global health agencies, medical research facilities and pharmaceutical companies, technologies including genomics, advanced data science and data-generation techniques are being employed to develop effective treatments and a vaccine – as they were during the much smaller Ebola, SARS and Zika outbreaks.
Each day I’m seeing news stories about the use of other D2D technologies, such as graph databases and supercomputing, to try to get a leg up on tracking infections and accelerating the vaccine research, respectively. These are the front lines of the war on the pandemic, and let’s all hope that it’s a battle soon won. Our doctors, nurses and all healthcare workers deserve our thanks for putting their own lives at risk to serve others.
Agile Businesses Will Adapt to the Crisis and Lead the Recovery
What about businesses that aren’t on the healthcare front lines? Most are hunkering down and just beginning to come to grips with the new realities. Some are coping with unexpected bursts of new business. Zoom and other online meeting platforms are seeing a huge wave of new business. FedEx, UPS and postal services around the globe are seeing surging volumes all while dealing with social separation edicts in hard-hit areas. Amazon, WalMart and other online retailers are hiring, as are paper products manufacturers that produce boxes for everything from pizza delivery to online orders to medical supplies.
Whether you are part of a business that is surging or suffering, there’s another class of D2D technology that will prove useful to businesses coming to grips with the impacts of COVID-19. I’m talking about planning platforms, also known in the past as corporate performance management (CPM) or enterprise performance management (EPM) software.
The alternative to these sorts of (now typically cloud-based) systems has been the chaotic and cumbersome approach of sharing spreadsheets and collaborating via email. This incumbent approach obviously invites data-entry errors and version-control hell. It’s also a notoriously slow and painful manual approach that organizations avoid doing more than quarterly or annually.
It’s obvious at this point that all businesses need to rip up and replace the budgets and planning assumptions they created going into 2020. Modern planning platforms are connected and collaborative, so all financial and operational planners share the same data. They can quickly plug in new numbers and planning assumptions and collaborate around the new plans and expectations. It’s a fast and flexible alternative to emailing spreadsheets around.
How is this different than BI/analyltics? The big difference between general BI and analytics platforms and planning platforms/CPM is that planning software/services are built for financial analysis, giving financial planning and analysis (FP&A) professionals the ability to model future outcomes and do what-if scenario planning. The planning platforms also often include dashboarding and data visualization components, but the emphasis is on financial planning, budgeting and forecasting capabilities.
First-generation CPM systems were typically used exclusively by centralized finance teams working on corporate-level planning and financial close and reporting. Modern planning platforms support not only more agile and flexible planning for corporate finance departments and CFOs, they’re pushing planning more broadly into the business, so budget holders and financial planners embedded in business units and departments can better budget and plan sales, workforce needs, marketing efforts and supply chains.
As we move toward recovery (hopefully sooner, rather than later), organizations that have planning platforms in place will have advantages in being able to adjust to changing conditions quickly. They’ll be able to anticipate cash flow and financial results, replan workforce and supply chain requirements, better understand sales and marketing trends, and quickly reprioritize on all fronts.
Who are the leading vendors in this market? The leading incumbents in on-premises CPM software deployments are Oracle Hyperion, SAP Business Planning and Consolidation (BPC), and IBM Cognos TM1. Over the last 10 years, and accelerating quickly over the last five years, we’ve seen rapid growth and replacement deployments by cloud-based alternatives, such as Anaplan, Adaptive Insights, a Workday company (acquired in 2018), Planful (formerly Host Analytics) and supply chain specialists, such as Kinaxis.
Cloud options are now grabbing the lion’s share of the growth, so the incumbents have responded with their own cloud offerings over the last three years. Oracle has introduced the Oracle EPM Cloud (which includes several different SaaS EPM applications). SAP has introduced the SAP Analytics Cloud, which has optional planning capabilities. And IBM now hosts TM1 deployments on the IBM cloud.
Is it too late to help organizations deal with this crisis? Cloud-based planning platforms can be deployed fairly quickly, but it could be three to six months before the financial data and planning assumptions of an organization can be set up and the platform used effectively. That’s assuming your organization is more generally prepared to collaborate and work remotely amid shelter-at-home and social distancing directives. At a large or complex organization, it could take a year or more to deploy a planning platform for central finance and broad operational use.
There’s no way around the harsh economic impacts we’re going to see in this crisis, but better and more responsive planning could help soften the blow and hasten recovery when things start getting back to a new normal.