By Robert Douglas, Europe Planning Director at Workday Adaptive Planning
Organisations across the world are currently dealing with the economic instability brought on by the fight against COVID-19. On top of being forced to adapt to these unpredictable circumstances seemingly overnight, the impact of the pandemic continues, challenging companies to course-correct in nearly real time, with no end in sight.
The key to persevering in this fast-changing world is the ability to identify disruption and proactively respond to it, which is why trying to work with a business plan developed months ago limits an organisation’s ability to be successful on both counts. The reality is that agility starts with planning. And, in these times, scenario planning gives organisations the ability to weigh trade-offs and explore the impact of different decisions.
The pandemic perfectly illustrates that no one can ever claim to know exactly what lies ahead. But preparing for the unexpected is key in order to respond with agility. Successful finance leaders and financial planning and analysis (FP&A) professionals can identify a list of potential scenarios the organisation might face and then map out potential outcomes. This allows them to also propose actions that can be taken to mitigate the most critical risks associated with all identified eventualities.
Running accurate scenario planning on short notice, especially in the face of uncertainty, can be challenging. While the process itself boils down to a handful steps, carrying them out efficiently requires having access to solid data and the technology necessary to run multiple, sophisticated models.
Assessing the impact to the top line
Preparing for any significant event or change requires planning. Many companies coming into 2020 were already assessing if the long-running economic expansion would begin to show signs of slowing. The pandemic, while sudden, accelerated the need for scenario planning at a pace that most companies had never experienced. At the onset of the pandemic, it was reported some finance teams were handling 30 times more forecasts and build-out scenarios than in a typical week*.
Because there is no historical data for a pandemic, many companies started by assessing the impacts to the top line of their business. Modelling things like new sales, business renewal activity, and any upsell opportunities for customers to create that topline start. From there, teams might consider a range of scenarios, for example looking at 50 percent, 65 percent and even 80 percent of pre-pandemic plans. This allows a view into what could happen to the balance sheet and income statement to better help businesses understand variances on the metrics that matter most to them.
Considering the current economic and health crisis, the focus is really on the “levers” that can be pulled to make trade-offs. For most companies, the biggest expense is people, which is why workforce planning has emerged as a top priority for 2020. Looking at whether to continue with hiring or freeze hiring in certain areas or regions allows teams to evaluate various outcomes. And since no company wants to cut jobs, it’s important to have a full understanding of the various levers available in order to make the right decisions that align with the longer-term business strategy. All options need to be put on the table and assessed against a range of scenarios.
Align and execute
While scenario planning and ‘what if’-analysis is owned by finance, it cannot be done in a finance vacuum. Leaders from across the organisation need to be involved with validating all assumptions made and make sure the right levers are identified from the start. This keeps everyone aligned, and with modern planning solutions, this can be done seamlessly using real-time dashboards with up-to-date data that executives can access around the clock.
Apart from agreeing on the current state of the organisation, finance teams and leadership need to also agree on what the best outcome for the business looks like. This will require understanding the priorities across the workforce, customer satisfaction standards, sales, product development, and more. By agreeing on the organisational priorities up front, as business strategies are revised, the scenarios the finance team needs to focus on can be identified and managed.
The speed at which the economic outlook changes also means scenario planning, like every other sort of planning, needs to be continuous. Priorities will inevitably change in the face of new developments impacting the business, and as soon as this happens it needs to be communicated to finance so that new scenarios can be created and evaluated to inform decision-making.
Once the finance team has established the scenarios with which it is working, defined the top priorities for the business, and identified the levers it is willing to pull, it becomes worthwhile to dive deeper into the data and generate sophisticated and actionable in-depth plans and reports. For some companies, this will mean digging into supply chain issues, for others it may be assessing risk by segment or proactively offering support to clients and customers.
Technology as the enabler
Being able to answer crucial ‘what if’ questions for the business—and do so at the pace our current climate dictates–relies on modern technologies. Without a powerful IT infrastructure that can support real-time access to performance data from across the organisation combined with modern planning tools, teams will be challenged to create the plans and reports needed to guide critical decision-making.
Innovations in FP&A technologies have already reshaped many finance teams and ushered in unprecedented business agility in recent years. By moving away from on-prem data silos to the cloud, where data can inform highly complex models on demand from anywhere around the world, businesses have ensured they have the capacity to effectively plan for a near-infinite number of scenarios.
No one knows what lies ahead, but through the power of “what if” finance teams can help organisations adapt and adjust as business conditions change and continue to do so. And while the pandemic has certainly escalated this need, the effective use of scenario planning has proven that finance teams can embrace flexibility and use it as a strategic advantage.
GOING GLOBAL: 7 TIPS TO GET STARTED
The idea of selling your products or services to new markets across the globe is an attractive prospect for any business, large or small. But while reaching new customers and unlocking the potential for further growth can seem exciting initially, adapting your business to foreign markets is no small feat. Factors such as cost, communication and cultural differences can all affect your business’ success when going global. This guide will explore some of the key considerations to make when you’re thinking of expanding your business overseas.
Evaluate Your Finances
One of the main questions to ask when looking to go global is whether or not your business can afford to do so. Crossing borders can be a complicated and expensive process which can take away time and resources from other opportunities at home. Growth for businesses abroad is often a slow process; establishing products and services in other countries takes time, so you will need to factor this into your planning. Thorough analysis of domestic and international markets should always be undertaken before making the decision to expand your business overseas.
Location, Location, Location
Choosing the right location is crucial to the success of your business expansion. International business network Going Global Live says that taking your business to the right countries initially can save you money on excessive marketing and advertising, putting you face-to-face with your target market from the outset. You should weigh up the pros and cons of potential locations, such as the likelihood of being able to fill your new HQ with prime, homegrown talent, as well as access to desired markets aided by foreign investment bodies. It is also important to consider the relevant laws and regulations laid out by national and regional governments.
Ensure You Have the Right Infrastructure
Making sure your business has the right infrastructure to handle expansion abroad will put you in a good place going forward. Implementing a clear management strategy, both locally and centrally, will set your business up for a smooth and successful launch overseas. Having up-to-date IT and communications systems at the centre of your business will allow you to share information and data securely. When it comes to shipping, choosing the best – and most efficient – transport and storage providers will give you the peace of mind that your products are safe in transit. Companies such as S Jones are ideal for businesses looking for more information on storage solutions for shipping overseas.
Build a Strong Team
Appointing a strong team to oversee your expansion is crucial to your company’s success in new markets. Hiring people with a good knowledge of your target market, as well as a focus on your business’ interests, is key when establishing your overseas HQ. Working with local partners can help you to communicate your business’ unique selling point in a meaningful way. Having an experienced partner or mentor that you can trust to oversee the expansion will allow you to stay focused on the bigger picture and ensure that your attention isn’t taken away from your core customer base.
Once you’ve made the move to globalise your business, be sure to have faith in your ideas and don’t be deterred by slow progress. Dr Shai Vyakarnam of the Cranfield School of Management says that while there is a fine balance between faith and stubbornness, you’ll need “incredible levels of self-belief and faith in your idea” to succeed, and that you “only need to be able to turn a few key people in your favour and the others will follow”. Making well-informed decisions quickly will allow you to stay on track and will nullify the threat of any lingering self-doubt. While progress may be slow at first, be sure to remain patient and be prepared to build personal relationships to gain the trust of your new partners and customer base.
Consider the Impact of New Ideas
When implementing new ideas for your business as whole, consider how they will be received by your new international customers, as well as by your existing customer base at home. What might be seen as a positive idea in your home country could be perceived as offensive or alienating by your customers abroad. Factors such as differing time zones, languages and cultural appropriateness should always be taken into consideration when making key decisions to eliminate the risk of alienating foreign customers and damaging your reputation overseas.
While it is important to have faith in your business and be patient initially, you should also be willing to make changes as things develop. Acting on the advice of experts is key to navigating new markets successfully. It may be that your products and services require innovation to meet demand, or that cultural differences lead you to make changes to your marketing strategy. Being adaptable will give you the best chance of meeting consumer demand on a global scale.
When trying to expand your business to an entirely new customer base, try to bear in mind some of the above points. As long as you remain patient and open-minded, then you should have little difficulty in marketing your business globally.
Homepage, S Jones Containers, https://www.sjonescontainers.co.uk/
‘7 Tips for optimizing international business communication’, 99designs, https://99designs.co.uk/blog/tips/tips-for-optimizing-international-business-communication/
‘Going Global: How To Expand Your Business Internationally’, Business News Daily, https://www.businessnewsdaily.com/8211-expand-business-internationally.html
‘Going Global Means Thinking Global: 8 Tips to Consider’, Cranfield School of Management, https://www.google.co.uk/amp/s/blog.som.cranfield.ac.uk/blog/going-global-means-thinking-global-tips%3fhs_amp=true
‘Our Top Tips for Going Global…’, Going Global Live, https://www.goinggloballive.co.uk/news/blog.asp?blog_id=21679
REDUCING FRICTION ONLINE HAS BECOME BUSINESS CRITICAL
Andrew Shikiar, Executive Director at the FIDO Alliance
The global pandemic has pushed the importance of remote access and authentication right up the agenda for many businesses. All those occasions where people would normally show up in person to open a bank account or pick-up some high street essentials were simply not possible for large parts of the year. Even as restrictions have eased across the country, these kinds of face-to-face transactions remain an unappealing prospect or a last-resort to many.
Not surprisingly, this has led to unprecedented demand for online and remote services. This brings with it a host of challenges and opportunities, and we have seen many examples of companies brilliantly adapting and reacting to this new way of life. But one issue that businesses and individuals have been grappling with for years – that of frictionless transactions and authentication – has now been put under a brighter spotlight as it is increasingly critical to get right.
Friction impacts the bottom line
The core challenge facing businesses is how to strike the right balance between giving customers the best possible experience of online service, and the necessary regulatory and security implications that directly affect – and often contradict – that ideal user experience.
We’ve all likely experienced the very real kinds of friction I’m talking about – it’s the account you gave up on registering for, or the purchase you abandoned because the process was just too frustrating.
Friction like this has direct bottom line impacts through the loss of sales and/or disaffected customers – and it is substantially more pronounced in the current climate. People have less money to spend, they are spending a greater proportion of this reduced pot online, and businesses are competing for their livelihoods to claim their share. Providing a frictionless experience can be the difference between success and failure.
Banking and retail lose out
Nowhere is this problem more keenly felt than in the retail and banking industries. Countless transactions simply don’t happen each year due to issues with passwords or mobile One Time Passwords (OTPs) at the point of signing-up or checking-out.
Data from Statista shows that 69.57% of digital shopping carts and baskets are abandoned and the purchase not completed. And Mastercard’s analysis estimates that up to 20% of mobile e-commerce transactions are abandoned or otherwise fail (e.g., from undelivered SMS OTPs) mid-way.
In addition, independent web usability research institute Baynard found that one out of five consumers abandoned their online shopping carts citing the checkout process as “too long and complicated”. That means 20% of customers taking their custom elsewhere, likely to a competitor, because the process presented too much friction.
Passwords are a major part of the problem
Organisations have struggled to strike that balance between frictionless yet secure online log-ins in large part because of historical dependence on passwords – which simply aren’t fit for purpose in today’s online economy. Passwords were designed to be simple but, as we can all likely attest, they have become incredibly cumbersome and difficult to manage.
The demands placed on consumers to remember and keep track of the array of different passwords they need, and the different requirements of password complexity which varies from provider to provider, is proving to be untenable.
Not only are passwords a major cause of consumers giving up on purchases or preventing them from signing up for new services, but they also fail in delivering on their primary objective: to protect accounts and sensitive data. All too often the password has proven to be a single point of failure, and one that is all too easy for hackers and fraudsters to get hold of – a trend accelerated by the coronavirus pandemic.
There has been a move toward developing and adopting open standards that enable any online service provider to authenticate users in a way that is both highly secure and almost completely frictionless – with all major platform and cloud service providers coalescing around a common approach.
It’s clear from the way consumers have embraced using their fingerprints and FaceID to unlock their devices that simple, natural gestures work – and that they are often preferred over using a password. By adopting the latest authentication standards, organisations can enable their customers to use these same easy gestures on their every-day devices to prove their identity and approve even the most sensitive of transactions.
The standards also improve security by moving away from the traditional model where your password or similar piece of ‘secret’ information is stored on a server, to one where credentials are stored on an individual’s device. This means they cannot be phished or divulged through other means of social engineering, while also inherently stopping the large-scale breaches that impact millions or billions of users in one go.
Due to these developments, the kind of poor user experience that leads to abandoned shopping carts and lost customers during the sign-up process is completely avoidable. There is now nothing stopping banks, retailers, and a range of other businesses from offering a superior, and low-friction user experience while also maintaining the safety and integrity of the networked economy.
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