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Planful Virtual Tour 2020 - Bose reveals lessons learned on the way to continuous planning

Jon Reed Profile picture for user jreed May 26, 2020
On the last day of Planful's Virtual Tour, I searched for proof points on continuous planning in the real world. A standout customer presentation from Bose showed what's needed in today's disrupted markets.

(via Planful)

I checked out the Planful Virtual Tour with a few burning questions in mind. Last week, I looked at how The Boston Red Sox are using FP&A to respond to a disrupted market.

Another top question: how are customers faring in pursuit of continuous planning? As I wrote:

In truth, continuous planning is a continuum, not an end state. For some companies, just getting to a monthly planning cycle is a huge step forward. Then you push further.

Yes, but that's not enough, is it? The COVID-19 response is forcing the issue. The Red Sox story was about running multiple scenarios, quickly categorizing all expenses into essential and non-essential, and other urgent projects that make quarterly planning cycles suddenly obsolete.

Bose on planning - don't bombard your system with data

Luis Martinez Luna, Sr. Financial & Business Analyst at Bose, shared how they transitioned from annual to quarterly planning, with a potential push to Dynamic Planning still ahead. Luna addressed the business impact of the COVID-19 crisis, which has Bose has faced head-on, both in retail and workforce management. 

Learning about Bose's COVID-19 response, what really struck me was: you need a core of financial planning principles that can serve you in any economy. As Luna told us:

Without a clear vision, you're going to end up going in circles. You don't know where you're going; you don't have a destination.

Luna says a clear vision doesn't necessarily mean you can become a continuous planner out of the gate. But it means you'll know the right next step. He shared key "pillars" of Bose's FP&A strategy. Here is my take on those, with his quotes:

1. A data-driven approach to planning doesn't mean you bombard your system with data. Luna:

We're focusing on not throwing the kitchen sink of data into [Planful] necessarily, but really taking the time to figure out what are those key levers that impact our business both positively and negatively, and making sure that we don't bring in anything that's just going to be noise.

We want to make sure the data is accurate, and that it's been scrubbed. And that it's just quality information that we're bringing into our planning process.

2. If you're data-driven, you must also have agile and relevant processes for each business unit, or those insights aren't relevant.

We want to make sure the [planning] tool is dynamic enough and flexible in our processes as well, so that we don't have a one-size-fits-all for a business. We know that there's different drivers among the different business units that we have with Bose, whether that's our automotive unit, which is drastically different from our consumer electronics or health business. And so we wanted to make sure that the agility and efficiency applied across the board.

3. Being relevant to business units isn't just about data - it's about collaboration. Finance can't deliver relevance without stepping into a collaborative way of working.

We want to make sure that there's operational accountability, there's a connectedness across the business to the planning process. Again, this is not just something finance does, but something that becomes core to our day-to-day processes. There needs to be transparency. So where is the single location - the single source of truth as wel - where all the key business stakeholders can go to, and make sure that we're all playing off the same sheet of music.

Continuous planning fundamentals - no unruly spreadsheets allowed

Then Luna added: "And it needs to be dynamic, right?" And that's where Bose's push towards continuous planning comes in. Luna made the continuous planning case: unruly spreadsheets and annual budgets aren't getting it done.

We live in a very dynamic world. Especially in times like this, we need to continually plan. If we think about a traditional budgeting process, it quickly become outdated.

The other shift with continuous planning - moving out of a finance-only approach.

We need this to be integrated. And so again, this needs to be part of the day-to-day planning and business operations. Whether that's a divisional quarterly business review that happens, or there is some real estate planning that needs to happen. We need to have all of that connected to our planning process. It goes beyond the finance-only approach to planning.

Luna walked us through their chronology, with milestones as the Bose finance team moved into more agile ways of working. Here's a few:

Q1 2017 - Bose goes live on Planful, and completes their first budget on Planful. "Not a true game changer," says Luna, "But a step in the right direction." Luna's team still ran their three month budget on Planful, but they gained on consolidation efficiencies: "There's less room for error when you're having to consolidate versus adding up cells in Excel."

Meanwhile, Bose extended the time horizon for planning - "because the world doesn't end when your fiscal year ends," quipped Luna. They moved to a five quarter rolling forecast, and now forecast two years out.

January 2018 - Bose moves to eliminate the static budget process (some optional budgeting processes were allowed during the transition). Luna anticipated my question: why did you allow for those exceptions? "It's not a sprint, it's a marathon. Some of the change management is really the hardest piece of this. We want to be flexible."

Luna also shared Bose's line-of-business planning projects. All projects come back to the same "pillars" he advocates. Example: working with Planful's Workforce Planning requires a deeper collaboration between finance and HR. Luna:

I don't have to go and dig up any sort of Excel file to know what we assumed in terms of resourcing. If I want to see the last plan, I can just go into the tool. 

Within Planful, managers can make a note of top performers at the individual employee level.

It's a dynamic, super flexible tool... As we get feedback from a user base, every single scenario can be really configured from the ground up. So it really is a flexible module within within the platform. And it's just easy to change assumptions.

And in today's high stakes staffing requirements, you've got to get workplace planning right. Luna:

If we think about the climate that we're in now, where we are as Bose, we're in a really consumer focused industry. And so the reality for us, like many of you that are listening, is we have to consider things like furloughing employees, terminations, reductions in size, re-opening - all in response to the economic impact of COVID-19.

My take

Continuous planning is not a flip-the-switch cure all. It's a vision you work towards, with a core set of planning principles that never waver, with realistic milestones along the way. The Bose story bears that out.

Alongside that, I have no problem with Planful emphasizing a set of quickly impactful use cases under the Planful Now monicker. If you can get use cases like Workforce Planning out the door, then finance teams will be perceived as relevant to the situation we now face. That's way better than being viewed as obsessive bean counters who make cuts without grasping context.

It's very tough to pull off so-called continuous planning while juggling spreadsheets - so modern planning tools are important. But as I wrote in my kickoff piece:

Modern tools are only part of that winning equation. Culture and process change remain the sticking points.

Halloran hits on that in his latest diginomica piece, Creating a continuous planning culture. I've got more questions on how customers can modernize planning amidst turmoil, especially when they face organizational resistance as well. But Planful's Virtual Tour got a few of my pesky questions answered. That's not something I can say about all the virtual events I've attended this spring.

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