Reopening and Recovery Part 3: Scenario Planning & Budgeting Process Improvements
Atlantix Partners | June 4, 2020
Continuing from our prior post, in addition to addressing cost structures resulting from the impact of COVID-19, senior finance leaders are focusing on “Scenario Planning and Budgeting Process Improvements.”
Finance leaders have had to lead a rapid transformation to determine how to effectively plan and forecast for their companies. With change being the new normal, leaders should employ scenario planning to anticipate needs/challenges and identify appropriate business strategies. It is critical to test the impact of these alternative courses of action and understand their financial consequences. As leaders become more comfortable with updated processes, they will need to make improvements last and adopt a continuous improvement mindset. Here are some suggested budgeting improvement strategies to consider:
- Implement best practice budgeting methodologies (which may have previously met resistance) such as; zero-based budgeting and rolling forecasting,
- Focus resources on scenario planning to make it data-driven, applicable at all levels of the company, predictable and sustainable,
- Designate a ‘devil’s advocate’ and alternative options for each budget review, and
- Leverage technology, such as using more advanced automation to streamline and reduce workloads.