Using data to orchestrate a stronger coronavirus recovery
What is the economic forecast for businesses in the foreseeable future? The lockdown that has been damaging our economy will come to an end, which means businesses need to start planning how they intend to recover. The U.S. government has made an effort to jumpstart the economy with a $2 trillion stimulus package. The great unknown is whether it will be enough. The good news is that before COVID-19, most organizations were collecting data about their businesses — data that can now provide insights into their recovery.
How can these insights be gained quickly and effectively? Most organizations lack the analytical maturity to have their team of data scientists build intelligent prescriptive models that highlight the road to success. What's the alternative? Smart enterprise performance management, or S-EPM, incorporates the power of artificial intelligence with the planning, budgeting and forecasting abilities of enterprise performance management. During this period of economic uncertainty, the Office of the CFO must be agile, responding to market trends, resource availability and operational issues.
To achieve this agility, the Office of the CFO needs to do the following:
- Process a vast amount of data in a short period;
- Develop a comprehensive financial and operational plan;
- Budget available resources and investments; and
- Forecast realistic outcomes.
Accomplishing these objectives requires intuitive technology that leverages a business’ current capabilities. Some EPM tools combine data capture, consolidation and visualization with a powerful AI engine delivering efficient planning, budgeting and forecasting models.
Planning for economic recovery requires the development of several predictive models. For example, consumer-facing organizations need to forecast when and if the consumer base will return in its entirety or choose other means for purchasing goods or services. Planning and forecasting this behavior requires access to external consumer data. While internal data helps businesses understand who their customer base was, only through the acquisition of external data will they begin to understand who their customer base is becoming. COVID-19 and the lockdown altered our way of life; the impact of that change is currently unknown, but planning is essential to a successful recovery.
Quickly assembling these models requires the Office of the CFO to use familiar technology such as Microsoft's Excel. Typically, MS Excel is not perceived as an EPM tool, but it can be enabled as an interface into an EPM environment. An easy-to-use (familiar) interface is hugely beneficial in that it allows staff to begin developing planning and forecasting models.
Once these models are in place, it is essential to realize that this is a dynamic process that needs to be reassessed continuously. Transitioning from a stagnant economic environment to an active one generates a vast amount of data depicting a changing market mixed with opportunities and potential pitfalls. An organization's ability to leverage that data for practical business actions is a crucial component of recovery. Useful data from both internal and external sources acquired continuously can be entered into the model, enabling current trends and activities to be identified on a timely basis. Continually obtaining data, in turn, enables an organization to make mid-plan corrections as required for a successful outcome.
Organizations that invest in data acquisition, performance planning and AI will have the optimal opportunity for a swift recovery. CFOs that leverage their data assets by implementing S-EPM gain valuable insights into the economic environment as it recovers. Orchestrating this recovery begins with inventorying data assets, investing in S-EPM and analyzing the results.
Fortunately, today's technology does not require an army of programmers; instead, CFOs can leverage the skills of their financial analysts to develop comprehensive planning, budgeting and forecasting models. A paradigm shift of this magnitude could not have come at a better time; thousands of businesses trying to recover may find that S-EPM is just the right solution to help cross the chasm.