When the pandemic hit in March 2020, Chuy’s, a Texas-based chain that owns and operates more than 90 Tex-Mex restaurants in 17 states, found itself facing the same uncertainties as every other business in its sector. Off-premises sales surged. Dine-in sales plummeted. Long-range plans went out the window.
Yet unlike many of its competitors, Chuy’s thrived. During the third quarter of 2021, the chain increased its overall restaurant level operating margin by 8.8%.
The steps Chuy’s had taken prior to the pandemic helped it respond quickly and effectively to rapid change. Most importantly, the company had implemented cloud-based, automated tools for adaptive planning that helped its financial planning and analysis (FP&A) teams optimize budgeting and improve decision making as they responded to the pandemic and a constantly changing business environment.
One Platform to Rule Them All
In times of market uncertainty, agility is paramount. Yet too many FP&A teams still rely on disconnected spreadsheets and legacy planning systems for planning and decision making. This structure puts strategy and operational execution at risk: fragmented data, manual planning, and static reports can lead to untimely reporting and incomplete, narrow analysis.
An uncertain world demands the ability to quickly and easily generate scenario versions, gain real-time insights, and access richer analytics. Aligning all teams on one planning platform can help organizations address this increasing complexity and help FP&A teams improve planning, budgeting, and forecasting processes to boost performance, efficiency, and growth.
As a health care company operating on the front line of the Covid pandemic, Delaware-based ChristianaCare had to make rapid decisions at the start of the outbreak about everything from ventilator supplies to caregivers who worried about their personal safety and well-being.
In response, the organization quickly replaced its annual budgeting process with a monthly forecast. It began tracking all of its Covid-related expenses. And it prepared for multiple scenarios, from best- to worst-case.
This was a massive undertaking that could have taken months. Yet ChristianaCare was already using a suite of financial products based on a single, modern planning platform, which greatly simplified and accelerated its planning and modeling—so these sweeping operational changes took the company only four days to implement.
From Two Days to 30 Seconds
Years before the pandemic, The E.W. Scripps Co. already faced a different kind of disruption: the decline of the newspaper business. Scripps responded to industry trends in the mid-2010s by pivoting away from print, once its core enterprise, to focus on local TV and national media. This move entailed multiple mergers and acquisitions—and increased its financial complexity.
In leaving its print legacy behind, Scripps realized its own business would benefit from a digital makeover. The company began digitizing its operations in practices including human resources, financial management, and analytics, and deployed its multiple new solutions across a common platform.
The change gave Scripps a unified source of company-wide financial and HR data, plus a framework for integrating the operations and financials of its acquisitions. The company also reduced time and effort significantly—cutting its monthly reporting process from two days to about 30 seconds.
Information Is Power
One more reason spreadsheets are no longer a sufficient tool for FP&A is the emergence of big data. Pictures, documents, and audio and video inputs don’t fit neatly into spreadsheets the way numbers in cells do.
Organizations that can access this semi- and unstructured data can better shape their business models. Top-performing finance functions devote 75% of their time to data analysis and insights. But 48% of finance executives report challenges working with multiple data sources and complex integrations.
The right modern planning solution can process complex data with machine learning to deliver richer insights and greater speed and accuracy. They can produce easy-to-use reports that clearly illustrate comparisons, trends, and metrics. And they can produce virtually unlimited scenarios for planning. These capabilities can help FP&A teams become more agile, adaptable, and strategic during times of uncertainty.
Executives are inherently aware of the importance of agility and the ability to work with big data. Some 88% of executives recently surveyed say flexible and adaptive planning tools are “very” or “extremely” important to planning. And 91% agree that modern planning tools can help organizations get more flexible and adaptive in their planning.
But there’s a gap between understanding and action: only 40% of surveyed executives say their planning is very flexible and adaptable.
Herein lies the opportunity. By closing this gap and implementing modern planning tools across a cloud platform with a single source of truth, organizations can position themselves not just to survive but to seize the new opportunities they discover in a rapidly changing world.
To learn more, read the HBR Analytic Services pulse survey report Organizational Agility Requires Modern Planning Tools.
— to news.google.com
