Mark Micallef
SVP and Managing Director of Anaplan
A white swan conjures up the image of serenity while the black swan is the opposite. Rather aptly, a black swan event is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. An unpredictable situation typically calls for a unique approach and that is why Mark Micallef, SVP and Managing Director of Anaplan, emphasizes the need for finance leaders to adopt a command center strategy to mitigate significant disruptions in financial markets arising from a black swan event.
In an exclusive DigitalCFO interview, Mark shares his insights on implementing a successful command center approach and linking commercial and financial decisions for better business planning and resilience.
Q: How can finance leaders implement a command center approach to better anticipate and cope with black swan events, and what are the key elements of a successful command center strategy?
M: In the world of finance, a ‘black swan event’ refers to a negative force that causes stock market turmoil, often with catastrophic consequences. These events, such as the Covid-19 pandemic or the global financial crisis, are known for their unpredictability. To anticipate and cope with black swan events, finance leaders can implement a command center approach.
A command center involves establishing a centralized hub or control room where critical information is collected, analyzed, and disseminated in real time. This approach replaces static systems or spreadsheet-based planning with real-time, advanced data analytics capabilities. A reliable platform for orchestrating enterprise performance serves as the engine for the command center, integrating diverse financial information into a single platform.
The key elements of a successful command center strategy include data-driven decision-making, cross-functional collaboration, and a focus on agility. By leveraging a command center, finance leaders can identify early warning signs of potential black swan events, plan for contingencies, and make informed decisions to build a more resilient organization.
Q: What are some of the challenges of adopting a command center approach, and how can finance leaders overcome them to ensure the organization is better prepared for unexpected disruptions?
M: Setting up a command center presents several challenges for finance leaders. One challenge involves data sources, such as integrating data from various systems across the organization and ensuring the quality and consistency of the data. Another challenge is the need for adequate resources, including skilled personnel and technology investments.
Many companies still rely on isolated spreadsheets for data, people, and plans, which hinders effective cross-enterprise collaboration. Overcoming these challenges requires bringing together the essential components of a command center: people, data, and plans. Connected planning enables real-time collaboration and data consolidation from diverse sources, breaking down information silos and promoting efficient decision-making.
Connected planning also facilitates agile forecasting and scenario analysis, allowing finance leaders to adjust plans swiftly and assess the financial impacts of different scenarios, including black swan events. By embracing connected planning and promoting communication and coordination across departments, organizations can overcome challenges and achieve greater preparedness for unexpected disruptions.
Q: How can businesses link commercial and financial decisions to supply chain planning within a single platform, and what are the key benefits of this approach?
M: Managing market volatility requires businesses to establish strong links between commercial and financial decisions and supply chain planning. This integration can be achieved within a single platform, such as the Anaplan platform, to enhance supply chain resilience.
By contextualizing supply chain operations in real-time, supply chain leaders can proactively assess and mitigate risks, while quickly executing plans to adapt to change. Real-time collaboration and data automation provided by the platform enable CFOs and CEOs to access up-to-date supply chain forecasts, plans, and reports, allowing for a more cohesive and resilient business strategy.
The key benefits of this approach include improved strategic thinking, proactive risk management, and faster response times to market volatility. Businesses can make more informed decisions by aligning commercial and financial objectives with supply chain planning, leading to optimized sales volumes, improved sales forecasting accuracy, and enhanced overall supply chain performance.
Q: What are the potential limitations of linking commercial and financial decisions to supply chain planning within a single platform?
In summary, rigid and manual planning processes, coupled with a lack of collaboration and silos within the organization, can result in sluggish planning efforts. Disconnected systems and data further complicate the process, making it challenging for business leaders to access and incorporate relevant data into their plans. Integrating commercial, financial, and supply chain data is complex, requiring alignment in objectives across different departments.
In addition, a shift in mindset is necessary as employees may resist adopting new planning approaches and unfamiliar technologies. To overcome these challenges, I recommend a gradual implementation of connected planning initiatives, frequent training, and change management activities. By addressing immediate pain points and gradually integrating connected planning, businesses can assess risks across the supply chain and make informed decisions to protect revenue, margin, and cash flow.
