According to a recent study by Vuealta, financial services institutions identify cybersecurity, political changes, regulation and compliance, data management and privacy, and planning and market uncertainty as the biggest challenges facing them today.
And the financial services industry isn’t alone in facing these challenges. Uncertainty, disruption, and a revolving door of market changes impact finance teams and decision-makers in nearly every industry—with market trends often leap-frogging across industries for far-reaching effects.
For example, the U.S. Census Bureau recently announced its retail and food services report for February. Among other trends, the report highlighted that online sales have gained a slight edge over brick-and-mortar stores (11.813% versus 11.807%), which represents a milestone in the scope and scale of online shopping growth.
This shift in consumer behavior towards the convenience of online shopping directly impacts two very different industries: the retail and the commercial real estate industries. For the former, this shift in consumer trends can affect investments made in product and distribution, among other dynamics. For the latter, it impacts the structure of leases in shopping centers and how investments are made with regards to demands for warehousing.
From financial institutions to retail to real estate and beyond, companies across industries are impacted by a common dilemma. How can organizations and their finance teams achieve growth and profitability in a world continually transformed by digitization, regulation, and evolving consumer expectations that span across industries?
The answer is simpler than one might think. Tackling this trending challenge calls for innovative business models and agile business processes—supported by highly responsive technology.
Evolving the traditional operating model
One of the first opportunities for finance teams and organizations that are fighting the good fight against disruption is the ability to innovate upon their traditional operating models. With new customer demands and capital and liquidity regulations, economic volatility, and multiple distribution channels emerging across industries, businesses need to evolve their traditional operating models in order to sustain a growth agenda.
For example, consider the consumer products industry. Having long served as the foundation to the modern consumer economy, it represents a key contributor to economic growth. Industry competition has always been fierce, and although the industry continues to drive efficiency and innovation, the present rate of market change remains extraordinary.
For finance teams, adapting to these continuously evolving market dynamics requires forward-looking and collaborative capabilities with technology and processes that are aligned and integrated—something largely missing from legacy planning technology throughout many different industries.
In financial services, enterprise planning and decision-making have historically relied on specialized software designed to meet the needs of specific functions. These siloed systems are often unable to integrate with one another to provide a complete view of enterprise-wide data, or a single source of data for planning.
Commercial planning companies face similar challenges; the lack of robust planning solutions in the industry leave finance teams and decision-makers leveraging software that simply hasn’t been designed to accommodate its specific industry complexities.
In commercial real estate, institutional and personal investors demand even more conditions with their investments, causing faster reporting with transparent calculations to quickly become the industry standard. Complex tools that require specialized scripting or custom spreadsheets, known only by an individual in the information chain, can no longer suffice here.
Regardless of industry, all of these traditional architectures can contribute to divided decision-making processes—those that piece together disparate data from multiple tools and block real-time, collaborative planning. They cannot support the speed, sophistication, or scale that businesses need in order to out innovate the competition by adopting better business models.
Move from inflexible processes to fluid planning capabilities
The report also reveals that financial institutions anticipate even more disruption from different factors in the years ahead, such as regulation and compliance, cybersecurity, artificial intelligence and machine learning, payments technology, cryptocurrencies, and blockchain technologies.
Planning is key to preparing for potential disruption especially planning that is continuous, at speed and as connected as possible. Managing and planning for continuous disruption and market changes through technology is therefore critical and it’s expected that the adoption of cloud-based planning technologies will continue within nearly every industry.
Cloud capabilities not only provide businesses with the flexibility they need to adapt within changing market conditions, but they can also complement and integrate with emerging technologies and innovative processes better than legacy tools.
Consider blockchain as a prime example. In financial services firms, the use of blockchain can free data from proprietary systems, which provides more information to analyze. Blockchain is also a key emerging technology for supply chain organizations, with its use ranging from smart contracts to security to traceability and more, in order to digitize the organization.
Yet businesses with legacy or manual planning environments can face difficulty in integrating their systems with a distributed ledger system such as blockchain. Finance teams using cloud solutions, on the other hand, can better incorporate distributed ledger data, perform forward-looking scenario modeling, analysis and forecasting, and deliver altogether more comprehensive and well-rounded insights.
Other technological capabilities that can enable better, more fluid planning processes include in-memory, real-time processing; flexibility, scalability, and instant query speeds; cloud with unlimited dimensionality; and advanced analytics that can combine data storage and processing speed.
As the uncertainty and economic volatility of market conditions continue to evolve, these types of cutting-edge capabilities and operating models can help finance teams better manage disruption, increase agility, and improve decision-making. Moving into the future with more capable planning processes and technology allows finance teams and industry business leaders alike to recognize how to plan for, rather than react to, a world that remains ripe to inevitable change.
Jason Ambrose is Vice President of Strategic Planning at Anaplan, Inc.