What is there a crystal ball?Public trust moves to dynamic forecasting

The crystal ball would have been useful this year as the world was tackling unpredictable and constant decline and flow. Financial planning can be difficult at best, but planning in a crisis situation takes it to another level.

During the COVID-19 outbreak, New Zealand’s largest will and real estate management service provider, Public Trust, recognizes the importance of dynamic forecasting and scenario planning and uses Workday Adaptive Planning to survive the unpredictable era. I implemented it.

The Public Trust was spending months preparing the FY21 business plan when COVID-19 hit and New Zealand was blocked. After that, the plan needed to be updated quickly for the new environment. Its management asked the finance team to prepare a scenario analysis showing the impact of COVID-19 on revenue, profit, cash flow and liquidity. The current system did not provide the necessary dynamic prediction and scenario planning, so we moved to Workday Adaptive Planning.

The End of Plan A and Plan B — Now Plan D: Dynamically

When the full impact of the pandemic becomes apparent, all pre-COVID business plans may be out of date. Greg Garland, Planning and Performance Manager at Public Trust, says the response is probably very similar to everyone else.

“We created and analyzed scenarios, talked a lot, tried to plan for what would happen, but it was still based on’I don’t know what I don’t know’,” Garland said. I will.

“Even at this stage, we found that the traditional bottom-up approach to annual planning was not suitable for our work, and we had to move to dynamic programming.”

Garland shows that its new dynamic approach has taught the team some important lessons:

  • Identify the main drivers of performance
  • Model the impact of each driver on profits, cash flow and balance sheet and build scenarios
  • Evaluate the sensitivity of each driver to fluctuations
  • Monitor key driver indicators weekly (and possibly daily) and update assumptions as needed

“For example, in the investment business, we needed to model the impact of each percentage point movement in the financial markets on revenue and profits,” he says.

A dynamic approach to performance and risk meant that executives and the board were able to stay up-to-date and still focus on long-term strategic goals. The Public Trust considered this essential as the situation changed rapidly and constantly, and traditional linear approaches to forecasting, planning, and action became unsuitable.

Plan E is to plan early

Garland believes you’re already too late if you’re planning a crisis.

“Putting yourself in pole position so you can manage in difficult situations is a much better approach, and it’s most important from a governance standpoint,” he said.

“Planning needs to be done early and continuously, where scenarios are important, but to do this in the best possible way, you need the right technology. It looks ahead of Excel. It’s a place I had to do, “he added.

Public Trust is scalable, collaborative, easy to maintain, cost-effective and, most importantly, cloud-based to support business continuity when you know you need to upgrade from Excel. He said he needed a product.

They also wanted a solution that was adaptable, simple, fast to implement, and had advanced features for dynamic planning, reporting, and business intelligence.
A good implementation partner was one who understood the business and had a collaborative methodology.

“From this perspective, we have identified Workday Adaptive Planning software and Deloitte as business transformation partners,” Garland says.

“This enables powerful planning and reporting tools and good implementation, which can bring significant benefits to business insights, finances, and broader management.

Where should we start by anticipating the unpredictable?

Having a solid financial forecast is an important anchor in times of uncertainty, but you need to have certain characteristics to ensure that it is suitable for your job.

  • Simplicity-means adaptable
  • Deal with what you know-defined information or relationships you can trust
  • Agility-Weekly and possibly daily reviews of various aspects of performance
  • Compare-Plot performance to find trends and compare financial and management data
  • Take Action-It’s practical, act on the information you find, and if that doesn’t work, check something else and try.

“Navigating unpredictable waters was juggling, ensuring that we stay focused on our long-term strategic goals,” Garland adds.

“By being dynamic, constantly planning scenarios and assessing risk, we are now in a better position to respond better.

“The future is unpredictable and there is no crystal ball, but dynamic planning puts us in a strong position to stay ready and continue to achieve our long-term strategic goals.”

What is there a crystal ball?Public trust moves to dynamic forecasting

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