This headline might come as - a surprise in early 2023 after three years of unrelenting, rapid-fire change. Almost every business trend has accelerated at an eye-watering pace, and chaos and unpredictability are now the norm. The response to this unceasing speed of doing business has been, you guessed it, more speed. Specifically, in FP&A, that speed means tapping into real-time data for insight and analysis to guide our planning and decisions with greater agility.
Today, we have access to more data than ever before and more powerful tools to analyse it rapidly and accurately. If we don’t tap into data-driven decision-making at all levels of business, especially financial planning and analysis, we’ll lose out to our competitors. I’ve written about nurturing this ability to react and flex based on what the data tells us in this publication. This publication said: “Mapping out a plan for 12 months now feels ridiculously archaic”, and advised you to shift to at least a quarterly forecasting and budgeting cycle, if not more frequently.
The two sides of the digital data coin
Let’s take a moment to examine what it means to say we have unprecedented amounts of data available today.
According to TeleGeography, a market research and consulting firm that maps global internet capacity, global internet bandwidth grew by 28% in 2022 to 997Tbps, which is just less than 1Pbps. That’s 15 zeros, by the way. It’s not just the capacity for moving data that has grown; as well as the pipes getting bigger, end-user speed has increased too. That means our ability to create and access data has sped up. Mobile download speeds have risen by 17% over the last year around the world, and fixed broadband has climbed by 28%, according to Ookla, the communications network testing and analysis company. Finally, the data travelling over these networks at speed is also growing. The total amount of data created, captured, copied, and consumed globally is forecast to increase by 2025 to more than 180 zettabytes (and that is 21 zeros!), according to Statista.
The perfect data storm This creates a perfect storm, where we are creating more data than ever before (human-to-human, human-to-machine, and machine-to-machine) and storing much of it. We also have the tools to ingest, store and analyse this data and to create information and insights quickly that we can use to forecast and plan. Advanced analytics and even Artificial Intelligence and Machine Learning technology are increasingly available to anyone – not only data scientists. As finance professionals, we are in a great position to realise what insights could be hidden in raw data. Suddenly, the term “number cruncher” takes on a whole new meaning.
We can start navigating a path through unpredictable times with real-time data-driven insights. And, as I recommended, we can speed up our budget cadence to four or more times a year with on-the-fly forecasting and re-forecasting.
While I stand by that recommendation, I also wonder if we are at risk of getting caught up in a “speed for speed’s sake” business culture. I’d suggest we replace a knee-jerk speed-at-all-costs posture with a “speed-up where it matters, but slow down where it counts” approach.
By all means, get the data and the data-driven insights fast. This is a significant competitive differentiator you can bring to your organisation. But when it comes to making the actual decisions that drive your forecasting and planning, I’d argue that you would be better served by building in a pause at this point.
You don’t play golf at high speed, even though you could
This realisation really landed for me during a recent golf game. I could race from tee to tee and from ball to ball. But would it be useful to maintain this haste as I selected my club and hit my next shot? Probably not.
I’d be far better served by taking stock, looking at the lie of the ball, gauging the wind and only then deciding my tactics and planning my actions. I’d decide on my next shot, where to position myself, select my club, take a few practice swings and only then play the shot.
Four steps to effective planning and analysis decision-making, from a golfer’s point of view
The comparison with a game of golf is quite useful to boost the argument for slower decision-making.
The drive is your power shot. It gets you from the tee as far down the fairway as possible and as close to the green as possible. Ideally, it sets you up for success. This is akin to the first review of your data analysis. You want to get the big picture and overall lay of the land and then decide on the general direction of your decision-making.
2. Approach shots
Approach shots become more nuanced. Now you need to avoid bunkers, trees, water features and other traps. You need to get more precise and goal orientated – setting yourself up for your final shots on the green. This is comparable to refining your decision-making. You can start zoning in on the analysis that matters, remove distractions and begin making logical links. This takes time: you need to let things percolate for new ideas to develop. There is likely to be more than one way forward depending on your ability to execute, your tools, the conditions and your appetite for risk and reward.
3. Plan B, considering the “what ifs”.
Sometimes things go wrong. Perhaps your ball finds the sand, a water trap, the trees or lands out of bounds. Suddenly the third shot you had planned for is no longer the shot you need to take. Ideally, you will have already worked a few “what ifs” into your thinking, and you have set the scene for any miss hits that happen to be marginalised as far as possible. But still, you’ll inevitably need to adjust your game on the fly. What you won’t do, though, is stick rigidly and grimly to your original plan, stoically chopping away at a ball trapped in the sand with your three iron, for instance.
This translates into banking enough time to reassess, adjust your expectations and revise your approach when things don’t go according to plan. Which, let’s face it, happens more and more frequently thanks to an unpredictable and chaotic business environment. Maybe now is the time to consult experts, and other stakeholders to get alternative or broader viewpoints.
4. The putt
This is the execution, the decision based on the insights gleaned. Because you have taken your time to reach this point, you are in the best position for success, on that day, in those circumstances – whether you are on the green putting for the hole or executing your business plan.
Slow down to succeed
Make the best use of that time you have gained by digitalising and automating your budget process, and use it to make considered, contextualised decisions in the analysis and execution stage. Run a few scenarios, consult stakeholders and experts, let the analysis percolate, and add contextual information and additional viewpoints. Of course, it's difficult when you have been moving at 100 mph just to keep up, to change gears. But you may find your overall progress accelerates more than you expected.
(I can’t guarantee you’ll improve your golf handicap, though!)
As published FP&A Trends - May 2023
 https://www.capacitymedia.com/article/2amlvt4vjgru66ccltam8/news/global-internet-bandwidth-close-to-1pbps-in-2022-finds-telegeography  https://www.ookla.com/articles/global-index-internet-speed-growth-2022  https://www.statista.com/statistics/871513/worldwide-data-created/