Is continuous planning a realistic goal for finance teams? Planful's CEO on how the pandemic changed planning, and what's next

Jon Reed Profile picture for user jreed May 28, 2021
The pandemic economy exposed our legacy planning approaches. But what to do about it? Planful has a continuous planning vision, but is it realistic? Planful's CEO shares what they've learned about planning maturity.

Planful CEO Grant Halloran
(Planful CEO Grant Halloran talking shop)

During pandemic times, Planful CEO Grant Halloran has kept the tips for finance teams coming.

I also shared Halloran's views in May 2020, when we were reckoning with a lockdown world (Finance leaders had to toss their pre-COVID-19 plans, so what's next? Continuous planning, says Planful's CEO).

So what's Halloran's view now? Have we learned something useful from the duress? (I sure hope so). As Halloran told me, Planful now has the problem all businesses want: a surge in demand.

It's been an incredible start to 2021. I would characterize it as a lot of pent-up demand coming out of the pandemic. Q1 was amazing - we were 47% up in terms of new customer acquisition, quarter over quarter.

The momentum continues:

We're getting close to closing Q2. I think we're going to be over 30% on sales volume. It's a really exciting time for the FP&A world, that's for sure.

On FPA momentum - "Customers that put projects on hold are coming back"

Halloran is also jazzed about a flurry of new go-to-market partnerships Planful has announced, including partnerships with Microsoft and Acumatica. It's always good to see these "pandemic emergence" stories, but what customer needs are driving this? Halloran sees several trends converging. Cloud adoption of planning tools is big, but what's really been disrupted is how we think about planning in the first place. Halloran explains:

A lot of customers that put projects on hold last year are now coming back... There just seems to be more of a greater recognition, if you like, of the ease in which you can implement financial planning, and a system in the cloud these days.

The pandemic certainly highlighted to a lot of CFOs and VPs of Finance that said, 'We need to modernize, we need the tools to be able to understand our business better.' But also, it's about speed. The frequency of course-correcting last year, I really think it highlighted for people how fragile their plans are, and how dynamic their business is. And that going forward, they need to be able to respond and course-correct quicker.

The fragility of plans and urgent course-corrections - yeah, that just about sums up the last year and a half, eh? Halloran says this seems to hold up in all industries:

I see it across all industries. But if I had to call out a few, I think it would be health. Bio-sciences has been strong. Then the direct-to-consumer world has really taken off. Retail is a pretty healthy area; more companies are realizing there's a lot of savings out there that consumers want to spend... They're looking to do it in new ways, more direct-to-consumer, more online.

Here's the burning customer issue I have for Planful: Halloran has written about the journey to continuous planning, a Planful mantra (How to build a culture of Continuous Planning in your business). And yes, disrupted organizations do see a need for more agile planning. But is continuous planning a viable goal yet? How can Planful help customers understand the realistic steps they can take - steps that might stretch them, but are doable, not marketing pipe dreams? Halloran responded:

Continuous planning to us is a framework. If you think about a journey, you've got to have a longer-term vision. I think it starts with aligning to what your CEO would want for your organization. If you ask any CEO, they're going to say, 'I wish we could go faster. I wish we were more agile; I wish we could course correct the business more frequently in response to what our competitors are doing.'

Internal issues add to the challenge:

There's also internal factors, where we misjudge whether new products might work well enough. You know, we had aspirations for certain things, and ROI isn't coming through. All these factors are in play.

So we have the obstacles, and the vision, but what about the next steps? Halloran:

The first very first step is: what are the table stakes? Are we still stuck in legacy systems that, frankly, were built, I don't know, for 1776? And no one knows how to use them, and hates using them every day? That's why we have this ubiquitous use of disconnected spreadsheets, because we have to take all this data out to be able to do anything.

Next, you nail down a better budgeting and reporting process:

You've got to stop there; you need to implement robust financial reporting. You need to get your annual operating plan done in the cloud system; you need to start conditioning budget owners and non-FPA folks to operate via browser, to be able to contribute their budgets, whether that's on an annual basis, or on rolling forecasts.

Rolling forecasts are the next push:

Now we want to move to a rolling forecast model. I can tell you, clients of ours that have implemented rolling forecasts... For example, The Red Sox baseball club, they have now cut out so much time. The Red Sox finance team is now able to get answers to the business quickly. But also the annual operating plan for next year becomes so much easier, because we already have an outlook. So I think that's the table stakes.

A continuous planing maturity model?

Ergo, Planful sees continuous planning as a journey, backed up by proven steps. Wouldn't the next step, then, be a maturity model for customers to follow? Halloran's answer is yes, but with this caveat: every customers' process will be different. He explains:

We don't necessarily know how long it will take. Some companies can get there within, honestly, two or three years, where they get very, very attuned to rolling forecasts. They've got hundreds of people outside of FPA interacting on the Planful system on a daily basis. They're doing use cases beyond finance. So they're doing operational data use cases, where they're trying to plan out capacity for venues, for resorts, for sanitation services, like what kind of level of resources do we need for that particular property at a particular point in time like that? Those are all multi-dimensional, what-if scenario models.

But that's something you build up to:

We typically don't recommend that a customer starts with that on day one, we say, 'Get your table stakes right, then move to these more value-adding use cases over time.'

Building organizational confidence in a new approach to planning is huge. Halloran says Planful has come a long way there:

We've completely re-engineered our methodology over the last two years, and enabled all of our partners around the world around this agile methodology. We call it Planful Now - it enables people to typically get a lot of these use cases up and running in 30 day increments.

My take

Halloran says once companies engage with their data, and make good decisions from that data, the momentum builds: "It fundamentally changes your business." He's also delighted to ply me with news of Planful's international expansion - Planful's number one "momentum market" is the UK. "This is just a global, phenomenon," says Halloran. "Everyone has to plan faster, plan better, report faster and better."

Planful's surging market will bring tougher competitors. Just about every ERP vendor is doubling down on their own planning and analytics - and we're talking about some deep pockets. Halloran isn't worried about what ERP vendors are doing, however - he sees too much value in pulling data from all of a customer's best-of-breed components. "The reality is, the single platform message is BS," says Halloran, not mincing words.

ERP vendors will become more of a threat if they can successfully embed planning and benchmarking into their core releases. Halloran isn't exactly quaking in his boots. He doesn't think ERP vendors will get their act together with embedded planning anytime soon. Meanwhile, he thinks Planful's ability to get a company's financial reporting up and running in 30 days, "talking to their different General Ledger systems," gives them an edge.

FPA is not a winner-take-all market anyhow. There will be a number of successful players, both standalone and ERP platform plays. With Planful, what am I looking for next? I'd like to see their progress on in-product collaboration. Yes, integration with the likes of Teams, 365 and Slack will be important - but on-screen collaboration to discuss flagged numbers might be more important. So is the ability for "AI" to identify anomalies. Can AI help business users spend less time managing numbers, and more time acting on them? How will Planful productize that? That's what I want to hear more about next time we talk.

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