Integrated Planning

Hertz understands the havoc that data errors can cause. Back in 2014, the rental car company found upwards of $46.3 million worth of errors in its 2011 statements. Emerging from a range of sources—from uncollectible fees for damaged vehicles, to doubtful accounts and miscalculations—the errors came with serious repercussions. Hertz not only saw a 9% decrease in stock prices but their CFO resigned shortly after. Still, that’s chump change compared to the data mistakes the Bank of America found the very same year.  Also in 2014, the bank found miscalculations in its 2009 acquisition of investment firm Merrill Lynch. As it turned out, Bank of America had overstated its capital position by $4 billion. Again, stock prices plummeted in the aftermath. Mistakes happen. These big business examples are proof enough of that. But they don’t always happen without consequences. They’re not the purview of big businesses alone, either. Small and medium-sized businesses (SMBs) are just as susceptible to the common pitfalls of data analysis—and the repercussions can be just as difficult to deal with. So what can go wrong for SMBs when the data isn’t right? Getting the Data Wrong Whether the result of human error, undefined processes, lack of collaboration or a range of other issues, there are plenty of examples of businesses getting their financial data wrong. Mistakes are a normal part of doing business, after all. But those data mistakes can have a ripple effect if you don’t catch them, which can have lasting effects for business owners and operators.  That’s not just the case for big names such as Hertz and Bank of America, either. With smaller teams and less-defined processes, small and medium-sized businesses can easily find themselves affected too. The resulting errors may not make headline news, but they can affect your bottom line, create inaccuracies in your financial statements and impact your reputation with customers and employees. So let’s look at some of the things that can go wrong for SMBs when the data isn’t right. 1. Lost Time A lack of collaboration and communication between team members can make duplicate data and data omissions more common than you’d think. That’s especially the case in situations where multiple invoices have been received for a single charge, or multiple team members are manually entering data in different versions of a spreadsheet. But if you don’t catch them, those duplicates and omissions can trickle down to impact your balance sheet, income statement, tax statements and more. To keep things running smoothly, then, it’s critical that you trust your data is right—and when you can’t, you waste time double and triple checking your numbers. That requires extra resources, leaving less time to spend strategizing towards your growth goals. 2. Errors on Repeat Omissions and duplicates add their own form of chaos. But what happens if a whole formula accidentally gets overwritten and every calculation that relies on it is wrong? It can be harder to catch errors like these, yet they can have more far-reaching effects, leading to multiple errors throughout your financial records. Putting more defined processes and centralized systems in place can help ensure they don’t happen in the first place. 3. Unruly Data Too many spreadsheets can make it difficult to keep your data straight—and to be confident you’re working with the most recent version. When there’s no single source of truth, especially with multiple team members making changes, you risk pulling up an outdated version or accidentally leaving a colleague’s hard work behind while you add your own updates. Having a central database can help ease this issue and make things run more smoothly, with a single source of truth. 4. A Foggy Perspective Processes such as budgeting, forecasting and scenario modeling rely on accurate data if you want to get them right. If the data’s wrong in the first place, or if you’re using outdated numbers to fuel your perspective, you’re at risk of getting things wrong—meaning you won’t be as agile for your future needs as you could be. 5. No Time To Analyze Working in finance for a small or medium-sized business may already mean you’re spending most (or all) of your time on traditional accounting duties. After all, your team is only so big and vendors, suppliers and employees need to get paid, financial statements have to be prepared and your overdue receivables need to be followed up on—among a list of other tasks. When you also need to spend time looking for data errors and dealing with any repercussions of those you didn’t catch, there’s even less time left over to spend on FP&A and the strategic planning that will help you in your business goals. Getting your data right, then, frees up time to get other things on the right track as well. Getting the Data Right So how do you make sure you have the data right, avoiding those all-too-common pitfalls in data analysis so that you can get on with business? Here are a few tips: Introduce a centralized source of data, with proper security and controls built in, so that everyone on your finance team is working from the most current and accurate numbers. That single source of truth will also reduce the need for repetitive manual data entry, freeing up time and minimizing the chances of human error. Put defined processes in place to help ensure everything runs smoothly. The right processes will reduce the chance of duplications and omissions and help you put safeguards in place to ensure your calculations are correct. Choose solutions that will grow with your business. As you grow, you’ll be wrangling more data and want more time to spend strategizing your future path. The right solutions can help you do all of that, scaling as you do. The right data is critical for all businesses, no matter what size they are. If you’re part of a small or medium-sized business, getting the data wrong might not cost you billions of dollars, but it can be damaging all the same. In fact, getting the data right in SMBs can be even more important—because, unlike big businesses, you don't have the luxury of large reservoirs to back you up if something goes wrong. The future of your company is reliant on data: to secure funding, build your customer base and keep building towards your goals. Without accurate data, you might not have a growth plan at all. Getting the data right, then, is critical. So why not make it easier to avoid the five major pitfalls in data analysis going forward? Excelerate Your Growth Discover how to consolidate your data, streamline your workflow, avoid common data mistakes and much more at this year’s Excelerate =SUM(it) 2022—Vena’s third annual virtual conference designed to power your personal, professional and business growth.

Small businesses are anything but small potatoes. As a strong source of new jobs (about 65% of them), they’re an economic driver. Yet recent numbers from the U.S. Bureau of Labor show about 20% of small businesses fail in the first year.  What’s worse: the pandemic and everything that’s happened since has upped the pressure. Like big businesses, small and medium-sized businesses (SMBs) have been forced to become more agile as they try to keep up with an ever-changing market. And with new uncertainties emerging in the form of inflation, supply chain disruptions and rising interest rates, they can’t afford to make any mistakes. So if you’re the owner or operator of an SMB, how do you hold onto a growth mindset even in the current climate? You take a page from the big business handbook.  Leading big businesses have made agility, flexibility and scalability their keywords, even through recent uncertainties, and SMB owners and operators can learn a little something from those rulers of growth. The following best practices can help you keep your operations running smoothly and free up your time to continue focusing on your growth goals. 1. Embrace the Process Big businesses have processes for everything. There are processes for hiring, processes for developing new products, sales processes and financial planning processes, just to name a few. Those processes are well documented and ever evolving as teams find new ways to add efficiencies and run their business better.  If you’re running an SMB and want to keep your own business on its growth trajectory, take a cue from big business and embrace the process. A set of defined and documented processes can help you add efficiencies to your SMB, create a consistent experience for both customers and employees and ensure everything is getting done to the same standard every time, no matter who’s doing it and when.  We’ll delve a little deeper into some of the financial and operational processes your SMB might benefit from in the best practices that follow. 2. Build the Right Team Your employees are there to support your goals, so it’s not surprising that the right team will help you achieve them faster. And big businesses know that to meet their goals, they need to invest in getting that team exactly right. Just like them, you want to search out skill sets that will both add value to your business and support the values you’re building it on. You want people who want to keep learning and aren’t afraid to bring their own ideas when it makes sense to do so. And while small businesses might be looking to cut costs wherever they can, the best big businesses understand that getting the best talent sometimes means paying a bit more—and investing in the training their employees need to thrive. Big businesses also employ workforce planning processes to help them build their ideal team and keep them ready for the job at hand—and SMBs can benefit from the same thing. Strategic workforce planning can help you identify the skills you need, build an onboarding process and determine ongoing training requirements. All so your business is positioned for the next challenge ahead and your employees stay happy in their roles on your way to getting there. 3. Embrace Technology When Salesforce surveyed over 2,500 small and medium business owners and leaders for its 2021 Small and Medium Business Trends Report, 71% of growing SMBs said their business survived the pandemic because of digitization. In August 2021, 42% of those growing SMBs said they’d accelerated their technology investments over the previous year.  The reasons those businesses upped their technology investment? Improving business agility (59%), increasing productivity (58%) and increasing data security (52%) were the top three reasons. Meanwhile, 28% said they wanted to store data in a centralized location.  Big businesses understand the right technology can help add efficiencies to your workflow, reduce the chances of mistakes caused by human error and enable you in building those defined processes we talked about earlier. And, as those SMB leaders interviewed by Salesforce already knew, technology can be a critical driver in improving productivity, increasing agility and building better data practices too. As such, technology can also play a key role in scaling your business quickly and keeping up with your growth goals. 4. Keep an Eye on the Prize (But Also Stay Agile) Big businesses have strong goals and carefully choose key performance indicators (KPIs) that allow them to measure their performance along the way to reaching them. And they’re constantly thinking strategically on how to improve that performance and get to those goals faster (at which point they set all new goals).  But big businesses have also learned—over the last two years especially—the importance of keeping their goals and the processes that support them agile so that they can pivot as necessary with the emergence of new market, industry and business demands. They use scenario modeling to make sure they’re ready for whatever the future holds, put real-time data to work and employ rolling forecasting so that their budget is always keeping up with their current business requirements. Strong goals—and the agility to evolve them on a dime—are just as important to SMBs. And, as big businesses have already learned, the processes and technology you put in place today will help you stay agile for tomorrow. Just like them, processes such as scenario modeling and rolling forecasting might be the answer to your ongoing success. Conclusion Big businesses have become big not just because they have a product or service with the demand to support it. Demand only goes so far. Most big businesses have also learned how to drive growth, measure performance and choose the right people, processes and technology to support their goals. Small and medium-sized businesses can benefit from many of the same best practices as they grow their thriving business. After all, if your goal is to continue scaling your SMB, shouldn’t you be thinking big from the start? Learn how Vena can help support your growth goals.

There’s a scene midway through Adam McKay’s 2021 movie Don’t Look Up (if you haven’t seen it, spoiler alert!). The president of the United States, played by Meryl Streep, has been presented with some alarming news: a comet is on trajectory to collide with Earth.  Based on the data-driven advice of a couple of astronomers (Leonardo DiCaprio and Jennifer Lawrence), Streep’s character will need to have the comet destroyed before it obliterates the world as we know it. But a corporate bigwig (Mark Rylance) comes to her with a money-making opportunity instead. Rather than destroying the comet completely, he suggests, what about mining it for the minerals it carries? His plan is untested and risky, and the entire fate of the Earth rests on proper execution—but the astronomers, for one, don’t believe the data exists to back it up. You can watch Don’t Look Up on Netflix to see what happens next. But if you’re an operational or financial planner who’s ever had trouble getting a seat at the table during strategic business planning sessions, you probably have an idea of how it goes.  Recently announced as one of the Best Picture nominees at this year’s Academy Awards, Don’t Look Up is a case study in what can go wrong if you ignore the available data and don’t plan strategically around it. And as it turns out, it’s not the only Oscar nominee we’ve seen over the years with strong messages and lessons for financial and operational planners. Past winners and nominees have their own cautionary tales to tell. But we did our research (movie night!) and found at least one former Best Picture nominee with a positive lesson to offer planning teams as well. So what does Hollywood have to say about planning for the future? Let’s take a look. 1. Don’t Look Up—But Do Look Forward While most of our daily decision making won’t be as potentially earth shattering as the dilemma at the heart of Don’t Look Up, the movie still teaches us that without a seat at the table—and the trust of higher ups—teams risk not getting listened to. And that’s something many finance and operations planning teams know well.  But the movie does more than that too. It also shows us the importance of paying attention to the data—even when it doesn’t tell us a story we want to hear. When none of your future scenarios look rosy, burying your head in the sand won’t help. In fact, that’s a time when you need to be at your most agile, helping to find ways for your organization to pivot effectively and avoid any dangers ahead. Here’s hoping those dangers aren’t actually world ending—but that doesn’t mean they won’t feel that way.    So how do you do that? What Could Have Helped At Vena, we like to say “hope for the best, plan for the worst.” And for financial and operational planners, that’s where scenario planning comes in—helping to add perspective to whatever the future holds by allowing you to plan for every possible scenario. In the case of Don’t Look Up, though, the president was hoping for the best while Jennifer Lawrence and Leonardo DiCaprio’s astronomer characters prepared for the worst. And the data said the worse was much more likely. They needed ways to get Meryl on board—data visualization tools and strong data storytelling might have helped, but a strategic leader that backed up the team’s findings (the astronomer equivalent of a strategic CFO) would have been a game changer. 2. Could Better Budgeting Have Saved the Titanic? No need for spoiler alerts here. Even those of us who haven’t watched James Cameron’s 1997 Best Picture winner, Titanic—and is there really anyone who hasn’t?—know how things turned out with the real-life RMS Titanic. The luxury cruise liner—a record-setter at the time for its sheer size alone—struck an iceberg on its maiden voyage and killed over 1,500 passengers and crew. But reports show that there was a lot working against the Titanic that day: it was traveling too fast, ignored iceberg warnings and may have taken a wrong turn at one point that led it directly to its destructive fate. Then there were the cost-cutting measures taken during construction that might have made the ship more damage prone, too few lifeboats and the fact that the lookouts didn’t even have binoculars (supposedly the only key to the storage room left the boat with a staff member who wasn’t scheduled for the journey).  So maybe all of that wasn’t covered in the movie—where would the Celine Dion song go if it was—but just like Don’t Look Up, this was a case where a careful examination of all possible scenarios would have done the Titanic good. Consolidating non-financial information, such as construction and materials data, could have also shown where cost cutting might be safe and where it definitely wasn’t (hint: you want enough lifeboats to give Jack and Rose—Leonardo DiCaprio and Kate Winslet—their happy ending, without having to worry about whether Jack could have actually fit on the door at the end or not). Also: maybe find a little extra cash for a second key to the binocular closet. What Could Have Helped It might be controversial to suggest, but is it possible that better budgeting could have saved the Titanic? By consulting with cross-functional stakeholders—most notably, those overseeing construction and lifeboat allocation—the right budget might have opened up resources for better building materials and more lifeboats, while showing their finance team where costs could actually be cut safely. And with the right data to tap into, predictive budgeting (had it existed then!) could have given the Titanic team a more strategic view into where to invest the budget they had. So who knows, maybe with a bit of number crunching, Titanic would have been an entirely different movie. 3. Was the Martian Agile Enough? Ridley Scott’s The Martian may have lost out on the 2015 Best Picture Oscar it was nominated for, but that doesn’t mean there isn’t plenty that financial and operational planners can learn from the Matt Damon-starring vehicle. Like Titanic, the crew of the ship at The Martian’s center—the Ares III, on mission to Mars—could have benefited with some serious scenario analysis. Unlike Titanic, though, this film is set in 2035, so their planning team would have plenty of tools and data sources to work with to build the agility they needed to be ready for whatever happens next.  If you don’t remember the plot: a dust storm on Mars cuts short a space mission but leaves Matt Damon’s character injured. His spacesuit is damaged as a result and falsely lets his teammates think he’s dead. They get out of Dodge (or off the red planet) without him and he wakes up only to realize he’s stranded alone on Mars. Thankfully, Matt Damon’s character is a one-man agile planning team and is able to think three steps ahead at every point in order to keep himself alive until help arrives.  Still, some better planning early on might have avoided the situation altogether. What Could Have Helped As far as film plots go, The Martian is rife with dramatic possibility: how on Earth (or Mars) is Damon’s character going to survive in such inhospitable conditions with the materials he has? But as far as good planning practices go, it seems like a deeper dive into the data could have helped prevent the problem before it happened. Maybe by consolidating their data—including the weather conditions on Mars and the specs of Matt’s suit—the folks at NASA would have been able to better plan for every contingency. And tools such as machine learning and artificial intelligence could have helped them look for patterns to plan against. Scenario planning could have helped them use that data to put a more agile plan in place and made them ready for anything. If we’re all about hoping for the best and planning for the worst, after all, what’s a worse scenario to plan for than leaving someone alone on a whole other planet? 4. The One That Got It Right Bad planning makes for good drama. And while drama may be something you want to avoid when you’re trying to put your business on the right path to success, it does make for a good film plot. All of which means there aren’t that many Oscar movies that show what good strategic planning looks like. But while it may not have taken home the top prize when it was nominated for Best Picture in 2012, Moneyball—starring Brad Pitt—is the exception, giving us a good look at the power of data-driven decision making. And in doing so, it shows us what every modern financial and operational planner already knows: that data-driven stories can be real crowd pleasers (and also, they get results). Based on a true story, Moneyball is the tale of Billy Beane, general manager for the Oakland Athletics, as he introduces a new strategic-minded approach to building up his team’s roster. Using data and a measurement-focused strategy to assess players’ values—then drafting lesser-in-demand players based on the resulting numbers—Beane and his back-office team were able to create a winning baseball team on a limited budget.   Not only that, but—unlike Don’t Look Up—Beane provides the strong strategic leadership needed to see those ideas to fruition. He has a seat at the table, standing up to the Athletics’ owner, manager and head coach as they each question his plan. And over time, he begins to see results: the Oakland A’s data-driven approach puts them on a winning streak that ends with the American League West title. By the end of the movie, Billy Beane is a strategic planning hero, with other teams introducing a similar data-driven approach. What Could Have Helped Nothing! Beane believed in the data and used it wisely, providing strong leadership and supporting his team in the process—both on the field and off. The only thing we do wonder is what technology the Oakland A’s have in place to help them continue to make the best planning decisions. We may just have a few suggestions! Conclusion We’re being a little tongue and cheek, of course, but with the Academy Awards coming up it’s hard not to look at movies for inspiration—whether they’re an example of what to do or not.  So what do you think of our movie choices and the lessons we got from them? Is there a movie you’d add to the list? Learn how Vena can help you plan for the future of your business.