In times of uncertainty, flexibility is key
These are worrying times. The Government has just recommended a significant increase in social distancing as a result of the COVID-19 Coronavirus epidemic, which will hit many businesses hard – both small and large. Nobody knows how long this state of lockdown will last, but it is likely to be many weeks, resulting in significant disruption to normal life.
Different businesses will be affected in different ways, but what is undoubtedly going to be common to most of them is that plans and budgets, painstakingly put together at the start of the financial year, are going to have to be drastically rethought. This is when the flexibility and responsiveness of an organisation’s planning tools really come into sharp focus, and Compas users, whilst still suffering a hit to their businesses, are seeing the benefit of being able to update their forecasts with relative ease.
Many businesses, even quite large ones, do a significant part of their business planning and budgeting in Excel. This can be time-consuming and painful, but is easy for people to understand and doesn’t have to be done very often, so they have often stuck with this solution. However, when the environment is volatile, plans need to be revised significantly on a daily or weekly basis. Under these circumstances, the ease with which forecasts can be changed becomes highly significant, particularly when staff numbers are down and time is at a premium.
Many budgets start by taking last year’s sales for a given period and applying a multiplier. In contrast, Compas can build forecasts directly from underlying business drivers, such as marketing activities. If an activity needs to be postponed at short notice, all that needs to be done is to change the date. If the response rate, average order value or product mix need to be changed to reflect the new circumstances, these can be updated individually. In this way, the marketer is given a number of levers that reflect real world behaviour and can be adjusted independently of each other. Compas then does all the hard work of recalculating daily orders, phone calls, product requirements etc. This enables businesses to optimise call centre and warehouse staffing, to manage logistics and to place orders with suppliers. It also recalculates all of the financials, meaning that Finance have access to an updated full-year forecast at all times, making budget restatements a simple case of taking a snapshot of the current forecast.
When things are tight, it is essential to operate as efficiently as possible, tailoring staffing, stock levels and other costs to expected sales. Compas makes that possible, at low cost and with minimal disruption to the business. Being cloud-based, it allows staff working from home to access the latest forecasts and update their plans as easily as if they were in the office. With daily feeds of sales and other data, it helps businesses to observe and react swiftly to changes in circumstances, and by bringing together all relevant data into one environment, it lets management see the whole picture. One Compas client is in a sector that has been subject to significant panic buying recently, with demand exceeding even that of peak weeks in a normal year. Whilst there is nothing they can do about that, at least they can easily run different scenarios through Compas and forecast the impact on their business of each one.
Contact us now to learn more and arrange a demonstration.