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How agile forecasting and planning is evolving the role of finance
In this episode of the Better Finance podcast, host Myles Corson along with Ryan Grimsland from Lowe’s Companies, and Loren Garruto from EY, navigate market disruptions through agile forecasting and planning.
Better Finance Podcast host Myles Corson welcomes Ryan Grimsland, Senior Vice President Corporate Finance and Treasurer at Lowe’s Companies, and Loren Garruto, EY Partner and Global and Americas Corporate Finance Leader. Together, they discuss how finance can enable business to better manage unpredictable market behavior as seen during the COVID-19 pandemic. They take a closer look at the challenges caused by the pandemic and how becoming more agile in forecasting and planning can help the business prepare for future disruptions.
The unprecedented disruptions from the COVID-19 pandemic have transformed how businesses think about and use financial planning and analysis (FP&A). The traditional key business drivers used to forecast needs and plan for both the short-and long-term suddenly took a back seat to new and unexpected consumer behaviors, changes in operating standards and supply chain volatility.
For Lowe’s Companies, this meant taking a different look at FP&A forecasting influenced by new and shifting factors as the pandemic unfolded. Their robust forecasting function enables their leadership team to make quick and informed decisions and maintain their priority focus on the health, safety and well-being of Lowe’s customers, associates and their families.
Finance organizations need to think differently around forecasting and its mobility to continue to enhance forward-looking insights and provide better decision-making for the entire organization when uncertainty arises again.
Key takeaways:
Companies with robust forecasting functions can quickly address critical stakeholder and board questions and test scenario outcomes when disruptions occur. At the other end of the spectrum, companies with forecasting programs “not fit for purpose” face making critical business decisions with incomplete or inaccurate data and predictions.
Investments in technology to analyze vast amounts of data and talent with the knowledge to recognize new business drivers will improve the speed to insight the business needs to make informed decisions and create a competitive advantage in the market.
Companies that memorialize lessons learned from the pandemic by developing playbooks for future crisis management will enable their management team to become more agile and react more quickly during times of uncertainty.
For your convenience, full text transcript of this podcast is also available.
Myles Corson
Hello and welcome to the Better Finance Podcast, a series that explores the changing dynamics of the business world and what it means for finance leaders of today and tomorrow.
I’m Myles Corson from EY. Today I’m delighted to be joined by Ryan Grimsland. Recently appointed as Senior Vice President Corporate Finance and Treasurer, Ryan joined Lowes Companies, the home improvement retailer in 2006 as a financial analyst for their US stores.
I’m also delighted to be joined by Loren Garruto, EY Partner and Global and America’s Corporate Finance Leader. Loren advises clients on corporate finance strategies that drive shareholder value. She has more than 25 years of deal experience on buy-side and sell-side transactions as well as joint ventures.
Ryan and Loren, welcome.
Ryan Grimsland
Thanks for having us.
Loren Garruto
Glad to be here.
Corson
Before we dive into today’s topics, perhaps you could both share a little bit of background on your career journey so far. Ryan let’s start with you.
Grimsland
I’ve actually been at Lowe’s for about 14 years now. Been into a lot of different areas of finance across supporting our stores, merchandising, international business development for a while, back to stores, and then now over our global FP&A area.
I took this role, and I couldn’t have timed it any more exactly with this COVID environment. Interesting timing of taking a global
FP&A position right when COVID hit and really impacted and changed the way we look at our business.
Prior to that, I spent some time at other retailers: Haverty’s Furniture Company and UBS Securities as well.
Corson
Well, as they say, timing is everything. So, thanks Ryan. Loren?
Garruto
Thank you, Myles. I have been at EY, I guess, for about 17 years now. Originally started out in the evaluation, modeling and economics practice and have worked on a number of transactions.
And in my current role as the Corporate Finance Leader, I still work with companies planning, executing transactions, and also developing other value-creation strategies.
As you might guess, most of the decision-making is based on forecasts. The accurate forecasting enables better business decisions, and then stress testing those forecasts further enables companies and stakeholders to get comfortable with uncertainty, which there is certainly more than enough uncertainty to go around in the current environment.
So, as a result, nearly every client discussion I’m having currently somehow makes its way back to forecasting, and a desire to improve the accuracy and timeliness of forecasting the business. Today’s discussion is very timely.
Corson
Ryan, you started off by referencing the pandemic, and clearly as businesses think about planning and forecasting, it’s been one of the key topics.
What’s worked well in terms of how you’ve responded, and could you tell us about some of the challenges that you also worked through during the pandemic?
Grimsland
Yes, absolutely. We made a distinct decision early on that we were going to make sure that we focused on the wellness and the safety of our employees first and foremost. And then focus also on the safety of our customers that are shopping us in the stores.
You start with that perspective and then work back from there. And when this thing first hit, we had no idea, and I don’t think anyone had any idea, who was going to benefit from it or not benefit from it.
How is this going to impact everyone’s business? We have done fairly well during this time period, but it has presented a lot of challenges. Early on we were looking at all the past recessions, flu, a virus impact, to think of H1N1 and looking back at how that impacted our business, just to try and get a sense of what are the next six months to a year going to look like?
None of those forecasts and outlooks transpired. It was a completely different trajectory than we expected. A lot of different factors.
The focus should always be on kind of the safety and health and well-being of our associates, their families, and then obviously the customers that are shopping us.
And then it’s, how do we then serve those folks? How do we make sure that we are putting the right safety precautions in place that we’re investing in the right infrastructure within our stores, that we’re getting the masks required to the folks, and to also to our community?
How do we make sure that the stores are in a clean, safe environment? How do we make sure that there is social distancing within our store? So, even while you’re in finance, you're still thinking about how do we make sure that we’re operating our organization appropriately, keeping everyone safe and secure?
From a finance perspective, those big challenges were … the business was trying to understand what are the drivers? What’s going to happen? What does that forecast look like?
And that forecast, the traditional drivers of your forecast are gone. What’s driving your business are completely different factors. Trying to understand what are those key metrics we should
be looking at? What are those factors that are driving our business? How do we help leaders make better, more informed decisions in this type of environment? Meanwhile, all of that’s changing day to day.
There are different decisions that are being made externally that are having an impact on you and your business. There are customer behaviors that are changing rapidly, daily, as this pandemic unfolded.
State by state, geographically, there are different changes, laws being put in place by state and trying to understand how that’s impacting your business.
So, those factors that normally impacted your business are gone, and you're looking for what are those new factors. And then making sure that you’re constantly evaluating those as those change. And then how do you build a forecast off that? The biggest challenge for finance is, how do we help the leaders understand what’s driving our business and where is this thing going?
Corson
That’s very helpful context. Loren, maybe you can share some of the perspective you have from working with companies across a variety of sectors, particularly on this forecasting issue.
Garruto
Sure, happy to, Myles. What the pandemic has done is shed a light on forecasting and scenario planning. And perhaps the FP&A function in general.
FP&A is really the hub of data and analytical capabilities needing to make some of these decisions that Ryan was addressing.
The forecasting function should help answer — whether it’s a key stakeholder, board questions — when do you expect demand to normalize? Are the immediate needs for short-term liquidity or long-term capital going to be met?
Companies that had a really robust forecasting function going into this were able to answer these critical stakeholder and board questions, and at least stress test and run scenarios to put bookends around the possible outcomes. But those with the forecasting program that I would describe as “not fit for purpose,” ended up making critical business decisions, somewhat in the dark, really based on incomplete or inaccurate data and predictions.
Having access to meaningful data as well as the analytical capabilities in house, and good technology and tools, became key to at least attempting to get a handle on what the path forward was for business.
Corson
Thank you, Loren. Ryan, you mentioned, as you were working through this process, all the drivers you’ve used historically had really become invalid, and you were having to look at a different set of metrics.
Can you talk a little bit more about, how you went through that process? Maybe give some examples of different data sources and ways you thought about the business to respond to this kind of very dynamic environment?
Grimsland
Yeah, absolutely. When you think about the home improvement market space and what typically drives that market space, a lot of it has to do with the home, housing turnover, new home sales and, in general, discretionary spend within that category.
When we look at housing turnover, interest rates, equity in the home — housing turnover immediately stalled and dried up. That would indicate that we would start to see our performance drop and that wasn’t what happened.
We started to look at other factors. What’s driving our business and in what key categories? We started to see the whole store across many categories, both our inside categories and our outside categories, rise together. What was driving this? We had to look at multiple different factors that were out there.
With EY and their Parthenon team, we really started to look at driver-based performance and what was in our numbers. We started to key in on a couple of areas. One of them was mobility. Everybody knows that people traveled less. They stopped traveling around the country. They were stuck at home. They didn’t travel to work. People started working from home.
So, the time in their home significantly increased while other areas — restaurants, accommodations, retail — took a drop, if you look at that year over year. That was one driver we noticed really had a correlation to our sales.
One of the other areas, though, is how the customer behavior changed fairly quickly and rapidly over time and you had to understand and look at different inputs. Early on, where folks were starting to stay home and there were restrictions on travel, in the beginning, consumers were not open to contractors coming into their home and doing work within their home. Even coming in and giving them a quote on a project in their home. All big contracts that require installation services dried up very fast. But over time, we started to see that spike back up. As consumers started to understand what does safety mean, and how can I be safe in my own home, they started to open up to projects on the outside of their home.
Getting fences and roofs done. We had to stay ahead of it, understand when will they actually start allowing contractors to come into their home? If they’re going to start accepting, how do we help them feel comfortable about our contractors coming into their home?
There are a couple of things we invested in. One was a remote tool that allowed pros to engage with the consumer virtually. This allows pros to have a conversation around the project virtually vs. actually having to be in the home. Well, that one started to take off and allow us to go into that market, because consumers were still wanting to do these projects in their home but felt reluctant allowing someone into their home.
Helping the business make decisions to invest in that and saying there is demand in the marketplace, but the consumer has to feel safe engaging. And then how do we make sure that the contractors go through the proper safety protocols, but also let’s communicate to the consumer what we’re doing so that they know we’re creating a safer environment when they do come into the home.
Understanding how the consumer behavior would change as they start to learn and feel more comfortable in this environment and what are true safety protocols, we had to make sure we were monitoring those types of inputs so that we could figure out where our business was potentially going and lean into those narratives. Over a three-month time period, you saw a big change in consumer behavior.
We really narrowed in on mobility. The other was discretionary spend and discretionary income. At the same time, government unveiled a stimulus package, and what we realized is that the discretionary income actually this year was higher than last year, even with unemployment in certain areas. The government stimulus had actually increased discretionary income for the general public vs. last year.
Folks are staying in home and wanting to work on projects in their home, having additional discretionary income, but then there’s another piece of that which is not spending discretionary income on other sectors. Not spending it on accommodations and travel, not spending as much on food and restaurants.
All this extra discretionary income, and now I want to work on these projects in my home. We knew there was demand in there for projects within the home.
Then we start working with the business to say, how do we make it easier for them to transact or feel comfortable spending it on those projects within their home. Those are a lot of different factors that we went through, but really narrowed in on what’s driving our businesses: lack of mobility, increased discretionary spend, and a lot of different initiatives we’ve put in place to really help the customer meet them where they were at. One other big initiative was our buy-online, pick-up-at store capabilities. A lot of omni-capabilities that are on our road map, we quickly made a decision to accelerate a lot of those projects. We were able to deploy our buy-online, pick-up-in store capabilities, curbside pick-up app.
We were behind a little bit on these, but now we’re able bring this forward. We are now the number one rated app with being able to transact and pull up curbside and call — and we have the product and brought out to you. A lot of those capabilities that would typically take us awhile, we recognized that these are capabilities we needed to put in the market immediately and rallied our resources to move these up.
So, finance has a big role. And Loren hit on it a little bit. That finance has a big role in helping leaders make the right decisions based on what we’re seeing in the forecast, and the way we see the consumer playing.
Being able to allocate our capital into the areas that are going to accelerate capabilities needed to meet those customers’ needs.
Corson
I think what you were describing is a great case study in leadership, agility, and resilience in the face of this disruption.
You say that’s not just finance, that’s the whole organization working together. Are there any lessons learned from navigating the crisis you feel will position you better as a leadership team to address future disruptions?
I mean obviously this isn’t a repeated thing. What are your key takeaways as a leadership team, and how is finance contributing to that?
Grimsland
There’s a lot of lessons learned throughout this process. But you hit on one, it was that agility, leadership agility.
Being a part of Lowe’s, just the agility that the leaders have shown over the past six, nine months through this process. And not just our leaders, but also all associates on every level and in our stores.
The agility to move and pivot and change in this environment quickly. We were rolling out change daily, hourly. We had war rooms set up to help understand, what are the drivers, what’s going on, where’s the product, how do we support our associates? Agility not just to meet the customer demands, but the agility to also protect and support our associates within our stores.
On the finance side, we had to focus on being agile and thinking differently about our normal processes. A lot of times in finance we really love what we do. We love our forecasts. We love our ability to pull all the pieces together.
We love that we know all the different drivers when we can forecast the heck out of them. But when you don’t know the drivers, and the drivers are new and different, and you haven’t forecasted those new drivers before, you need an organization that can be agile. You need an organization that can think differently and scan and pull things forward.
One of the things we learned was, we’ve got a lot of great folks here that look at the business differently every day and try to understand what’s driving it. And what opportunities are out there? Immediately the finance organization came together, and we started working on what are those key metrics we need to be looking at? What hypothesis do we have, and let’s start trying to prove those out.
You need finance folks with that journey. You need finance folks that can think differently about their process. And I think about just economic drivers.
When we think about an economic model driving the marketplace, it’s different today than it was in the past. If we used the same forecast tools, we would miss the boat on this completely.
We would miss what the next year looked like. We will miss what the rest of the year looks like. And what that ends up doing is we’re not buying the right working capital.
We’re not meeting the demands that are out there in the right categories. We’re not meeting the customer demands and where the customer’s going. We’re not properly allocating our capital to have the right forecast in place.
The lesson learned here, is that when we develop an environment where our associates feel comfortable voicing their thoughts, providing thought leadership and input, you have to create that environment.
We hire a lot of smart folks. We’ve got to give the opportunity and platform to speak up and feel comfortable to do that. We learned so much from folks just broad scanning and bringing things forward.
You also have to have the organization that takes action, moves quickly and is focused on delivering results to our customer. And those are some of the biggest learnings this past year is just constant agility, inquisitive folks that are looking and broad scanning to understand where the business is going and what’s driving the business.
Corson
That’s a great case study. I loved listening to that.
Loren, can I ask you to comment on how you’ve seen some of your other clients respond and what are they doing to make sure they take these lessons and memorialize them?
Garruto
Similar to what I saw after the great financial crisis, companies are talking about and embarking on a quest to memorialize lessons learned from the pandemic in playbooks for future crisis management. And I think several, and maybe this will be a best practice, are actually thinking about how do we imbed this agility and transformational management into our executive team, and going to the extent of actually doing table-top exercises of future unforeseen events, major business disruptors, and what would the response of the team be.
As Ryan touched on, the ability of management team to react quickly, be agile, deal with uncertainty, is going to be really, really important as we go forward.
Because I’m sure this won’t be the last major disruption that business executives are going to have to face.
Corson
Thanks, Loren. Maybe this is a good point to broaden out, we’ve talked a lot about the immediate challenges in the aftermath of the disruption of the pandemic.
If we think more broadly around trends in forecasting and scenario planning, what are some of the common challenges you’re seeing with companies across sectors as they look to more broadly improve accuracy and timeliness of forecasting?
Garruto
We did a recent client webcast on forecasting, and one of the polls surfaced the fact that nearly half of the participants cited access to meaningful and quality data was one of their biggest impediments to timely and accurate forecasting. This gets back to Ryan’s commentary on new data sources. There are many out there.
Clients have just started to delve into leveraging social media as a source of data, particularly around customer behavior. But in a unique circumstance such as the pandemic, when you’ve got a health crisis causing an economic crisis, there are lots of new unique data sources. Whether that’s around infection rates, by geography, government and health regulations, that are impacting the economic activity, to the mobility sources as well.
All of this data is readily accessible. Vast amounts of it, in fact. One of the biggest challenges is for companies, to figure out not only where to get the data but how to ingest all of it, and how to make sense of it.
Things like infection rates by geography may impact customer buying behavior, but they also might impact your workforce, and whether they can get to the manufacturing sites. Whether the distribution sites will be able to work, or your supply chain’s going to get snagged. It also could impact your suppliers.
There’s lots of interactions here and interdependencies. One of the big challenges is for companies to really grasp and leverage data analytics and data science.
One of the “aha” moments that many companies are having is to upskill the resources in our FP&A group, because learning how to deal with vast amounts of data, analyze it, sort of search out the new drivers of the business, is going to become critical, and it’s going to be a competitive advantage to companies that know how to handle the data.
Corson
Ryan, Loren mentioned data and the whole data analytics trend as being key. As you think about the investments you’re making in that area, data individualization, other technologies, and the upskilling how do you balance your priorities for investment?
Grimsland
Every company challenges how much do you invest and where do you invest in. We focus heavily on, what returns are we going to get? What are the benefits we’re going to get to the business?
We’re investing heavily in analytics. We’ve got a large analytics organization at Lowe’s that we started back in 2015 but really built this out starting in 2017 and now starting to see big benefits from that.
We invested heavily in tools for the business. And that’s really helped propel productivity within our organization.
This year, more importantly, it’s really helped us better understand some of the drivers of our business and leveraging the analytics function.
There’s plenty of data out there. It’s how do we get that data into a usable form so that we can actually do analytics and decision-making off of it.
That’s where our investment is going, is building out those platforms that takes that data and puts it in the hands of the user so that we can actually make decisions off of that data.
That’s the biggest structural issue that I think most people are dealing with and investing in is how do we get those platforms put in place.
We’ve invested in a strong data science organization here, and we leverage it heavily, especially now — and especially in test-and-learn environment and understanding what’s working and what’s not working. And then trying to understand, what are the drivers of our business? You think about the intersect. We have 40,000 SKUs in our stores. And we have 1,700 stores across 50 states here in the US. And if you think about that intersect, the current pandemic, seasonality changes, elections, about all these impacts that can be taking place, you need a strong data analytics organization that helps pull all of those intersects together and surface up insights that allow us to make better, more informed decisions going forward.
Corson
We talked about some of the opportunities and the benefits. Loren, perhaps I can ask you to comment. What are some of the key risk areas you think companies need to be aware of and thinking about?
Garruto
I would certainly say that changes in customer behavior are probably the most significant, most pervasive risk — and not only understanding whether the changes in behavior are temporary or permanent. If they’re temporary, when are they going to revert back to what was normal?
Another key risk area is liquidity and capital constraints. We’ve talked a lot today about forecasting demand and potentially impacts on the forecasted P&L. But probably can’t emphasize enough the risk that goes with not actually forecasting in an integrative set of financial statements and stress testing the balance sheet to understand, really, the bookends of future performance. And are you comfortable with that amount of uncertainty? And is your short-term as well as your longer-term capital position there to support the operations?
Another issue is the supplier instability, as well as the cost volatility that that might inflict on your P&L. Monitoring those key suppliers and having mitigation plans for how to deal with one of them goes bankrupt or is shut down for a significant period of time.
Predicting those issues in the supply chain are going to help you manage your inventory better as well. And help you figure out if you're going to need to run with higher levels of inventory as an insurance policy against those disruptions in your supply chain.
Corson
Ryan, to that point, you’ve obviously faced both the disruption on the demand side and the supply side in terms of obviously delays getting product. As you think around that scenario of planning, where do you tend to focus most?
Grimsland
We focus on the demand side. That feeds everything else. When we start to forecast the demand and looking at that by category, then we match that up against our ability to actually supply against our vendors’ ability to supply against that.
How do we move that through our infrastructure and get that there? We need to start with a demand-side side forecast and that sets the table.
Those are exact risks we have in the market today. And what we’ve seen play out is that what suppliers can meet the demand, how do we mitigate those suppliers to make sure that we augment them with others that can come in and meet the demand.
That has been one of the biggest challenges over the past six months, is just making sure that we are managing our working capital to meet the current
demand in the marketplace.
That speaks to the point of demand forecast and understanding what that looks like going forward.
Loren, you spoke about the liquidity risk going forward — I think if folks don’t have a strong demand forecast, and that capability, there could be big misses and working capital pushes and buys that they’re stuck with and could really hurt their liquidity down the road, depending on how that demand plays out.
We are constantly evaluating our demand forecast matched against kind of our receipts forecast, and what we’re buying from a working capital standpoint, and making sure we’re adding the inventory that we expect to need going forward and not adding inventory everywhere. That is focus from a forecast standpoint right now, just to make sure that we’re adding the right working capital in the right places to meet the demand.
Corson
As you think about that, and you think about measuring the improvement in your forecasting accuracy, are there particular metrics that you look at when you are using things like machine learning, which is an important topic in this area to continue to drive that improvement?
Grimsland
Oh, absolutely. That data analytics organization we have and that investment we’re making there really helping drive improved demand forecast. And I mentioned it earlier, the 40,000 SKUs intersect the 1,700 plus stores. You try to think about creating demand forecast for that by geography in a pandemic. That’s daunting in itself.
And if we didn’t have that data analytics organization really helping drive that, it would be very difficult right now. It still is difficult in this environment. That’s a big focus for us right now, is making sure that we’ve got that right demand forecast. We’re investing a lot of our time and capabilities.
Corson
Loren, talk more broadly around the role of the finance function. You obviously have a unique insight from your role in terms of what role finance plays in corporate strategy and how you’ve seen that evolve over the last few years. Perhaps you could comment on that?
Garruto
Planning and forecasting from my perspective really sits at the heart of complex decision-making in a company. The future role of finance is definitely evolving and elevating from the tactical preparer of budgets and financial statements to really having a seat at the strategic leadership table, being not only a key strategy partner, but a key manager of corporate value.
I often have the discussion with companies on future vision. And it really is evolving the function from one that spends 80% of their time on budgets and 20% on analysis to just the opposite — spending the vast majority of their time on things like data analytics.
That is going to both reduce the cycle time of getting to answers if you’re leveraging technology and analytics and data science, and it’s also going to enhance the insights that you're able to bring to the strategic leadership table.
Corson
As you think about Lowe’s journey, and your journey as a finance function and how you enable the success of your business, what do you see has been the big opportunities and challenges?
Grimsland
Loren hit on it. It’s that evolution from that planning organization into that insight-generating organization. Part of that is how do we involve our forecasts to be insightful and help leaders make better decisions, but also the analysis that we produce and spending time and energy on that.
When I started way back in the day here at Lowe’s, we were traditionally a reporting and planning organization. Our world revolved around our annual planned cycle. We had highs and lows throughout that planning cycle. We needed to evolve our organization to be insight-generating. Part of that is your structured data analytics and strong development capabilities there.
We are invested heavily in making sure that our data structure’s in place. What happens today is a lot of finance organizations spend a big portion of their time just data-wrangling and pulling the data together before they actually even get a chance to look at it, analyze it, and deliver insights from it.
How do we shorten that lead time of data wrangling? How do we get the data into platforms that allow us to quickly access and pull insights and analyze it? That’s a big focus of our IT organization and finance to really drive, improve data structures to get to insights extremely fast.
Corson
What you’re describing, Ryan, is fantastic. But I’m sure that creates its own pressure, as a finance leader, to be driving all that improvement, particularly in this very disrupted environment, whether it’s just the technology pressures, geopolitical pressures, or the pressures of the pandemic we faced over the last few months.
As a leader, how do you manage through that and keep your organization successful and working and collaborating?
Grimsland
This is probably one of the more challenging times. And you would think, as a business that’s actually faring well through this pandemic, you would think that maybe your life would be a little bit easier in finance. But it’s actually much more difficult right now. We’re under a lot of pressure to make sure we do deliver insights and help the business make the right decisions. That puts a lot of pressure on your organization.
When you’re still investing, still transforming, and trying to get to that vision of what you think finance can be, it makes it very difficult to invest for the longer term in those capabilities while still trying to meet the customers’ demands of “I need insights today.” And that puts a lot of pressure on your organization.
If you're developing an environment where your associates understand the impact the work they’re doing has on the business and how they directly are driving and helping leaders make these decisions, that drives engagement a long way.
As leaders thinking about leading the organization through this, is helping them understand and conceptualize what they’re doing and how that impacts the business. And then providing that platform for them to feel valued and their voices valued. We hire smart people. We want to hear what they have to say and create that environment for them.
But then we try to balance all of that with keeping an eye on delivering results for the business and making sure we are delivering insights that are meaningful — insights that the leaders can make decisions off of. And that’s the balance we have to play.
Corson
Your point, Ryan, around how you deliver insight and enable people. It’s such a great message to end on. I really appreciate the time you’ve both spent today to share your insights with us. It’s been a fascinating conversation.
Perhaps just in closing I could ask each of you to share one or two key recommendations you’d ask our listeners to think about, particularly in the current environment? Loren, let’s start with you.
Garruto
I would say that when it comes to forecasting, don’t get behind the technology curve. Look at using analytics and automation to speed up your cycle time, to get from data input to having a consolidated point of view. And leverage statistical analysis and scenario planning to quantify the uncertainty as well as identify what the key business drivers are and eliminate focus on what I would call inconsequential assumptions. Because really you want to enhance forward-looking insights and to get to better decision-making for the entire organization.
Corson
Ryan?
Grimsland
I would echo that. I would. I would say continuing to focus on that data and getting that data into the hands of the analysts as fast as possible and improving your data infrastructure to support that — if we can reduce the time to insight, that will go a long way with the business in helping us make
more informed and better decisions.
The other piece of that is creating an environment where folks are agile and thinking differently about the business and valuing their voice. Things are changing so fast.
Loren hit on it earlier in our conversation around one of the risks is just consumer behavior changes. We have to think differently as a finance organization around how we forecast or what we’re forecasting. Just think about forecasting mobility. It’s not traditionally what finance has done in the past. But if that’s having a big impact on our business, how do we think about forecasting mobility?
Some of the things we’re going to have to think differently about as an organization. And I would say lean into those areas: invest in the technology, invest in the data, and making sure you have the right data in a usable form, reduce the speed to insight, and think about what are those different things we need to be looking at — different data points. How do we as a finance organization evolve so that we can share those insights with the leadership teams so we can make better decisions?
Corson
Thanks, Ryan, and thanks, Loren. For our listeners, thank you for listening as always. We’ll post links to the survey that Loren mentioned to ey.com/better finance. If you enjoyed this episode, please subscribe, leave a rating or review wherever you listen to your podcasts.
We look forward to welcoming you on the next episode of the Better Finance Podcast, a series that explores the changing dynamics of the business world and what it means for finance leaders of today and tomorrow. Thank you.
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