Member Article

How to increase cross-departmental engagement in your planning process

Full business partner participation in planning, budgeting and forecasting can be difficult, especially given the complexity of engaging departments outside of finance in the process. However, there are some strategies that can be implemented to help encourage cross-functional engagement and build confidence in the business planning process.

1. Defining strategy—and then align the financial plan

Business strategist Roger Martin argues that using the words ‘strategic’ and ‘plan’ together can only result in both being ineffective. Rather, he argues that an effective strategy should focus on how to most effectively generate revenue or achieve the company’s highest priorities. With a clear strategy established, annual financial planning processes take on the responsibility of assessing the costs and resources necessary to achieve the goals.

This approach provides more clarity, whilst also aligning budgeting and planning with the revenue-generating and high-priority goals of the organisation. Finance can move with this culture by playing a leadership role in encouraging the development of a coherent strategy, allowing it to become more relevant and connected to top priorities. This alignment of functional plans to the corporate strategy can help finance have more productive conversations with business leaders and give business leaders a greater role in managing their areas of the business.

2. Taking a rolling approach

Many functional leaders believe that putting time and effort into an ‘annual plan’ is an exercise of futility, as it will become outdated and irrelevant by the end of the first quarter. Indeed, the pace of change today is such that a fixed plan spanning a year often only guarantees cynicism from those enlisted to help define it. Instead, rolling forecasts can occur frequently on a schedule rather than being a once-a-year exercise. Unlike complicated budgets with hundreds of line items, rolling forecasts focus on key budget drivers. This means they are forward-looking and can function as an early warning system, flagging divergences so the levers that drive performance can be adjusted.

3. Increasing transparency and visibility

Successful financial planning requires continual engagement throughout the year. Infrequent and poorly timed meetings with business leaders can lead to them becoming sceptical and cynical about the process, as they rather be provided with greater real-time visibility into analytics, trends, and results. Luckily, there are new technology solutions out there for finance to utilise in order to give a 360-degree view of the business and create dashboards that provide a full spectrum view of data and insights in real time. When the dog-eared budget in a ring binder or stored in a forgotten spreadsheet is reconfigured into an dynamic digital window into the organisation, business partners are bound to become more engaged in planning and budgeting processes.

4. Going beyond the usual suspects

Once a dynamic rolling plan is established, there is an opportunity to look deeper into the organisation to better identify key drivers of results and revenues—as well as issues and programmes that are pushing costs up. A key way to increase engagement and get more relevant data and business insights is to consult the expertise and knowledge of individuals closer to the front lines of the business or operation. It is best to work with business leaders to identify their team members with hands-on insight into the key daily challenges and opportunities.

5. Speedy and continuous communication

It might be cliché in terms of major business initiatives, but communication is key to driving long-term engagement and results. Finance teams need to adopt an approach that ensures communication touch points between departments and functions throughout the year, encourages input, and helps refine processes and workflows. As engagement deepens, more on-the-fly communication and connections should emerge. Centring the planning process around ongoing discussion about the business and best results allows for relationships and trust to be built, which in turn enables relevant and accurate plans to emerge.

Changes in how various departments cooperate around financial planning will not happen immediately. But with a more dynamic and flexible approach to business planning, organizations will gain deeper engagement, more timely information and insights, and, ultimately, better results.

This was posted in Bdaily's Members' News section by Adaptive Insights .