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We are living in very unusual times. How can a business accurately plan for its future without understanding what the future holds? How can the right data insights, architecture and understanding help elevate organisations to the next level?

In the first blog in this series, we have seen how organisations need to adapt to accommodate for the unprecedented times that we find ourselves in. We cannot accurately measure what tomorrow will bring, as the goal-posts change every day. We are all in a limbo, where we make plans, but are not sure what will come of them. The traditional methods of planning and forecasting aren’t effective in such times. In today’s world, superiority stems from adaptability and proactivity. What does this mean for finance teams attempting to cope with fluctuating demands and capturing the myriad of scenarios that the business requires? What does this mean for the underlying processes, products and data that Financial Planning & Analysis (FP&A) functions interact with?

With the pandemic as it is, organisations cannot rely solely on previous forecasts to help plan for the current situation. Moreover, organisations cannot depend on just the data they have been using thus far. Many more drivers and influencing factors need to be considered to encapsulate a wide range of aspects and articulate the skews caused during the pandemic. Trends and patterns between these factors enable one to dynamically derive data-driven insights to influence the planning that occurs within the FP&A function. This is where we enter the world of predictive.

By embracing a full view of the business in this manner and leveraging advanced analytics, an organisation can elevate their planning process to meet the demands of the new normal. Predictive planning gives us the ability and foresight to make essential ‘make or break’ decisions.

Planning in a pandemic requires the business to focus on four key areas:

  1. It’s all about Data
  2. Scenario Planning
  3. Distributing Information to Stakeholders
  4. Automation

It’s all about Data

As the previous blog demonstrated, integrating systems is key. Connecting to and receiving data from multiple sources allows for a more influenced prediction. To truly understand the factors that can influence a forecast, and consequently a prediction, it is essential to have architecture that allows for systems that talk to each other: understanding consumer profile data, having regular product information, understanding the current state of production lines and many more. Information from other areas of the business can help paint that picture of the full journey and thus contribute to the financial image of the business that FP&A functions need to depict.

SAP Data Intelligence (SAP DI) can assimilate this information, and provide a complete and complex data pipeline to refine the output of these sources with a mature Extract Transform Load (ETL) process. Using the machine learning components within SAP DI via the open source engines can enable the use of powerful algorithms within R, Python etc. to generate a model that can scientifically understand the impact of all these drivers that an integrated architecture can readily provide. Data scientists within the business can use their domain knowledge and technical prowess to implement their own models, ones that the business may already be using. For instance, can an organisation predict future operational cost by analysing consumers’ propensity to engage with certain areas of the business? This methodology truly imposes an advanced predictive mentality around the forecasts that FP&A functions produce.

Scenario Planning

During uncertainty, finance teams need to be prepared for any eventuality to try and get close to the bulls-eye. Being able to continually trial and test helps map out the different scenarios that may arise in the future of the business, thus allowing for planning to be more constructive and truthful.

The scalability that comes with SAP DI allows for the continual re-scoping of predictive models that can then capture the fluctuations in data that are coming through the connected data streams. Replicating the underlying algorithms that generate the predictions and having the ability to manipulate these drivers to assess the resulting impression can freely facilitate rapid scenario modelling.

SAP DI’s ability to regenerate and indicate the business impact allows for dynamicity and regular user interaction that can drive strong predictive analysis. Channelling this control into the planning process lends itself to a more receptive and prepared result. It empowers the business to be ready for whatever unknown is imposed, ensuring that any projected view is always keeping up with the ever-changing environment.

Distributing Information to Stakeholders

In any global crisis, visibility is key. A state-of-the-art integrated architecture for your data that also harbours predictive power is redundant if that information cannot go anywhere quickly. Key stakeholders need to know the current state of their organisation and what the future holds, and therefore, easy distribution of the generated predictions and forecasts is essential.

The visualisations provided by SAP Analytics Cloud (SAC) do just this. Once the organisation has the underlying architecture that leads to the smooth generation of predictions, SAC has the ability to display this information in a visual, consumable manner. Creating an easily digestible view for all members of the business can aid key stakeholders to get to the bottom of the vital information that they need to understand the current state of affairs and react. For example, the scenario planning enabled through the dynamic prediction generation can be readily available in the form of a ‘Pandemic Dashboard.’ This visualisation and instant interpretability can assist in collating the data in a way that displays these forecasts in the most practical way possible. It encourages organisations to move away from passive remediation and towards having this information at hand in order to react swiftly in the best interest of their business.

Automation

Long gone are the days of the manual refresh. Pandemic times call for timeliness and efficiency, as well as ensuring minimal latency in predictions. Therefore, the process of integrating models and efficient distribution channels is a process that needs to be quick. Ideally, it is something that requires minimal manual intervention and can be triggered from the metaphorical click of a button.

The inter-connectivity that comes with SAP products such as SAP DI, SAC and legacy warehousing structures means that your pipeline is inherent within your planning process. Data collection, cleansing and algorithm training can be orchestrated to allow for dynamic executions and reconstructions as a cohesive end-to-end journey. Running this pipeline from start to finish no longer has to be a time-consuming task and generates an effective workflow that can be called upon at any time.

The aim of this blog series is to highlight the steps organisations need to take to stay ahead of a crisis. Predictive methodologies integrated with automated solutions empower your organisation to harness the potential of machine learning to unlock the nuances that can uplift your function as a whole. Adopting an analytical approach that synergises your data provides an ever-evolving reflection of society and supports a more informed and responsive planning framework. SAP products like DI and SAC can help with just this. From enforcing a data-driven process to employing key concepts like predictive analytics, an organisation’s forecast can mature from a static, non-volatile process to an agile, reactive and sophisticated orchestration, grounded in science and insight. Having the ability to dissipate this information in a timely way, as well as re-optimise the operation on a regular basis, is essential if you want to be ahead of the curve.

When things are so uncertain, there is only one approach to remember: analyse today to anticipate the future. How can a business do this? Harmonise your data sources. Harness predictive. Leverage a 360° view of the organisation. Transform your visualisations. Automate and repeat.

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About the Author

Krupa Dodhia
Consultant

A developer with a background in EPM solutions and data science, currently supporting organizations with data-driven business insights through the power of advanced analytics and mature BI capabilities.

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