Practical Planning - Improve Forecasting and Modeling for Better Decision-Making

We had the opportunity to speak with Argyle at their Financial Controller Leadership Forum about Kainos’ adoption of Workday Adaptive. During this conversation, Matt McManus, Group Head of Finance at Kainos, and Brock Vaughters, Head of Operations, Americas at Kainos, discussed how automation and scenario planning has been instrumental in advancing the business, enabling efficiencies, and helping Kainos navigate global changes through modeling, forecasting, and budgeting. They also highlighted key FP&A challenges to avoid and answer key questions such as the best ways to hold the business accountable for budget, actuals, and forecasted results and recommendations for organizations struggling to develop a successful planning or forecasting framework. discussion.  

You can view the entire conversation here. 

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A New Normal for FP&A Teams 

The global pandemic in 2020 brought about dramatic changes for businesses as they suddenly had to shift from a “what has worked” to a “what needs to be changed in order to work” mentality. Employees were forced to work from home, supply chain issues caused delays to businesses, and the uncertainty of what tomorrow would bring rested heavily on the shoulders of Finance leaders.  

Meanwhile at Kainos, the Finance team had just completed its implementation of Workday Adaptive Planning to help with budgeting, planning, and forecasting. Less than three weeks later, Matt McManus, Group Head of Finance at Kainos had to send his team home for the first COVID lockdown. Here’s what he said about adjusting to unexpected changes. 

“Before COVID, Kainos would've done quarterly forecasting as a group and annual budgeting and then instantly [with COVID] you’re into daily forecasting, but in a much more acute cash flow needs point of view. As the weeks went by, it went from immediate cashflow forecasting into growth mode and scenario planning. It was an interesting period of adjusting to how the needs of an FP&A team, Finance team, or an entire business can change just from unexpected circumstances.”  

Brock Vaughters, Head of Operations Americas at Kainos – who at the time had not yet joined Kainos and was serving as CFO at a University – shared that he found himself asking the questions “What does this mean?” and “How do we do this?” He commented, 

“We had a budget for the year, we had plans, and then you introduce all kinds of involvement around PPP loans and how do you manage budget for those things or how does that then impact the forecast going forward? I'm always looking for what’s going to stay steady in the storm regardless of what’s going on around us.” 

Scenario Planning Adds Value to the Business 

Being able to easily adjust plans and plan for the unexpected has been a critical part of success for McManus.  

“[Scenario planning] has been a real game changer for us. With the old ways of modeling and Excel, creating a new scenario had lots of inherent risk about data integrity. And if it's FX, or growth rates, or utilization or whatever it may be, you have a new scenario. It’s where we’re adding real value to the business. You’re able to quantify the ‘what if’ to the business.” 

Automation is Key 

Prior to implementing Workday Adaptive Planning, Kainos was using Excel-based modeling, which didn’t provide the robust features necessary to lead a successful consulting organization. With about 90% of Kainos’ business being service based, it’s imperative to be able to know what the staffing cost is…and at any given time of the day. 

“We are able to press a button and we have an instant upload of our existing time staff profile within our planning module,” said McManus. “That’s given us accuracy on staff costs and total costs. So, that’s a stable foundation knowing that all the modeling we’re going to do is based on accurate, real-time, up-to-date data. Automation is a really important part of our process at Kainos.” 

Vaughters summed up automation by simply stating, “We don’t want to remove the human element, we want to remove the human error!” 

Modern Planning is a Team Sport 

When you strengthen collaboration between Finance and the business and everyone is on the same page, you gain buy-in and enthusiasm for the plan. Without consensus on key business drivers, your forecasts won’t deliver the insights your business needs. 

Putting the power in the hands of the stakeholders and all those who interact with the plan has been an important part of Kainos’ success. With everyone driving towards the same goal, it’s easy to be a unified team. 

“We were very keen that planning and modeling was seen as not a central Finance task. It was something that the business would own and stand over themselves. That requires a lot of change. SoSo, you’re going from people just saying, ‘Finance have told me this is my budget next year’ to ‘This is my budget next year and I know why I'm going to hit it or beat it or miss it." 

Avoid Common Pitfalls 

When it comes to pitfalls to avoid, McManus stated “If you’re able to do a model and you’ve built so much noise into it and you can’t extract the key meaningful piece of information, then it’s really not worth doing.” 

Additionally, understanding the context of what’s happened in the past – supported by data that’s reflective – is key to preparing for the future. Vaughters asks, “How do we adjust? How do we look at our data to make sure it aligns with our future expectations? The key is to make sure that the context around the data is really analyzed and understood.” 

Ready to learn more? 

Watch the full conversation to hear additional insights from McManus and Vaughters including: 

• How to convey the importance of timely and accurate data to get good forecasting 
• What are the best ways to hold the business accountable for budget, actuals, and forecasted results? 
• What recommendations can you make for organizations struggling to develop a successful planning or forecasting framework? 

To watch the conversation in its entirety, click here. Ready to talk? Contact us.