Many of us are about to face the most challenging time of our working lives. 2020 has been a year like no other and after 30 years of growth, Australia is in recession.
We are reading that the true economic effects of the global pandemic will play out globally for years. Right now, we have Government stimulus in the form of Job Seeker and Job Keeper, which are arguably masking and delaying the real impact of our changed world.
So, what happens when these stimulus packages end in September?
The truth is of course, we don’t really know but the effects are likely to be widespread across businesses and households. The knock-on effect for the economy will be significant with social and working restrictions, which affect so many businesses, likely to extend well beyond these initiatives.
There are less than 14 weeks before these two initiatives stop, so now is the time for businesses to be scenario planning and forecasting to interpret what this could mean to them; and to be identifying triggers to act, to remain sustainable in changing market conditions? Throw year end into the mix and that time will soon disappear.
How will revenue be affected? Is there risk to the supply chain and client base? Can we look at new markets? What resources can we hold on to? At what critical point do we consider re-structure and how do we best implement? The better prepared our businesses are for the future, the more likely we will be able to sustain a foundation for growth, when we inevitably emerge out of recession.
But improving planning capability is often perceived as a discretionary spend and is seldom at the top of the pile when it comes to improvements to business efficiency. This is extenuated when businesses are scrutinising costs. Where internal resources are limited, operating generally takes precedence over strategising. In many organisations scenario planning is time consuming and difficult to model. The demand from the executive, for ever changing forecasts and reports, often comes on top of regular processing and reporting obligations.
Whilst we can’t entirely predict the future, we can be prepared for certain scenarios. The more scenarios we can model and strategise for, the better protected our businesses and our employees will be.
Has there ever been a more critical time to address the financial planning and analysis capabilities within your business?
“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin, Founding Father of the United States
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