The Key to a Successful Agile Organization? Continuous Planning

by Michael Magaro

Learn how today’s finance leaders can use a continuous planning model to focus on agility.

©oatawa/iStock/Getty Images Plus

Traditionally, organizations have built up their budgets, plans, and forecasts along functional lines. But as evidenced throughout the pandemic, business processes can no longer respect functional boundaries. Over the past 18 months, executives across industries have had to pivot their goals and plans, with a key focus on agility. According to a recent Workday CFO Indicator survey, 49% of respondents reported their organization’s biggest gap in the past year was the ability to execute with the accurate and timely data required to drive quick and informed decisions. For finance leaders specifically, agility starts with re-evaluating your planning process with a focus on continuous planning.

Continuous planning is a simple and modern concept: business is continuous, so your planning should be too. But, according to Workday research, the three main barriers to more comprehensive, real-time planning are inflexible legacy technologies (28%), lack of relevant employee skills (26%), and a bureaucratic culture (25%). That’s because, prior to the pandemic, most organizations relied on a more traditional set-it-and-forget-it annual planning model, as opposed to a flexible and continuous one. However, annual planning is a labor-intensive process that makes an organization highly dependent on spreadsheets and legacy tools to map budgets to goals for the upcoming fiscal year. While great as individual productivity tools, spreadsheets don’t lend themselves to collaborative, fast-moving environments and quick decision making and legacy tools are rigid and not easily accessible by those closest to the business.

In contrast, a continuous approach allows businesses to optimize business performance in real-time, based on a wide array of data and insights. Continuous planning allows managers and decision makers to have the information they need, when they need it, giving departments the ability to collaborate cohesively and combat uncertainty while gaining visibility across an organization. Here’s how:

  1. Increasing planning frequency and process. Traditional planning is backward-looking and static, while continuous planning is forward-looking and dynamic. Moving from a static annual plan to a more continuous cadence, like quarterly or monthly, allows organizations to re-think their planning process to enable rapid review cycles, analysis, and adjustments. This ultimately allows businesses to close the gap between planning, execution and analysis, which dramatically improves agility by enabling course correction based on current data.
  2. Getting into the right operational rhythm. Deeper collaboration between organizational functions, paired with current, vetted data, results in real-time insights that gives executives a comprehensive view of the business, while creating a structure to better monitor progress and potential issues before they occur. It also allows for greater collaboration across leadership. For example, Workday’s COO and CFO began bi-weekly meetings to review product investments, sales plans, and performance, giving the greater team a structure to report back by allowing them to better monitor progress.
  3. Combating uncertainty via the cloud. Modern planning comprises three major elements: company-wide, continuous, and cloud-based. Embracing technologies in the cloud allows greater access to data, real-time insights and dashboards, providing finance leaders with the ability to evaluate and prioritize short and long term goals.

At Workday, we (coincidentally) began transitioning to continuous planning at the onset of the pandemic. While it was challenging to make a big operational switch like this, in hindsight, the timing couldn’t have been better. Through our flagship planning product, Workday Adaptive Planning, our key goals focused on:

  • Enabling greater visibility into a three year plan. In a three-year plan, the first year is pretty clear, the second year less so, and the third year is really unknown and often based on history without true foresight. But combining both operational and financial data and gaining deeper insights into product development, we now have a much clearer picture of years two and three. This allows us to take into account planned new products and solutions, so that we can better map hiring, sales, and services.
  • Planning accuracy to achieve our stated growth plan to $10B. With better vision and regular data updates, our accuracy has significantly improved, allowing us to map our strategic growth plan to our budgets company-wide. We also have current data enabling us to more easily adapt, taking into account industry or market changes, such as we saw during the pandemic.
  • Driving seamless collaboration (via the cloud) for teams across the globe. Providing a single platform -- vs. emailed spreadsheets -- allows us greater collaboration across our product, HR, marketing, and operational teams. Integrating data from across the organization into our system provides comprehensive visibility and allows our finance team to more easily partner and collaborate.

Now, six full quarters later, our team has realized that while it’s been a learning process, having a continuous plan allows us to truly become a decision-led-organization, with complete visibility across the organization. We’re now able to rank opportunities and prioritize those that best optimize our strategic goals. Since the adoption of this process, Workday has seen scenario planning increase by 4x and a 50% reduction in cycle times that’s allowed our teams to increase the time they spend analyzing data and observing trends by a full 50%. This is what we want our finance teams doing -- not spending time updating spreadsheets. For example, during the pandemic we spun up different what-if scenarios in Workday Adaptive Planning analyzing new revenue scenarios as well as expenses assumptions to see how all of these drivers would impact our P&L and cash flow statements. Doing this in response to rapidly-changing market dynamics really raised the confidence levels in our go-to-market teams to be bolder and allowed the leadership team to move forward with investing in strategic growth initiatives during a time of uncertainty. 

Continuous planning has proven to be a valuable tool amid a time of uncontrollable factors. Today’s environment has shown us now, more than ever, that business changes are continuous, and as such, modern planning needs to be continuous as well. Leveraging technology and data from across the organization allows the ability to review a range of scenarios and course-correct, empowering our teams to make decisions with confidence, while giving us the freedom to collaborate with teams across the globe.

Michael Magaro is senior vice president, Business Finance and Investor Relations, Workday.