Three Strategies to Help Your Midsize Company Grow, Part Two

This post is the second part of a three-part blog series. Here in part two, we cover the next strategy for helping your midsize company grow—the ability to quickly adapt to change.

Midsize organizations have a unique advantage over large companies—agility. “Mid-market companies have the runway to grow and aren’t subject to the laws of large numbers,” says Thomas Stewart, executive director at the National Center for the Middle Market (NCMM). “This enables them to move fast and take advantage of new trends.”

Yet capitalizing on new opportunities requires effective business planning, and this is not typically an area where the mid-market excels.

“For midsize companies, strategic planning can take a back seat to other priorities, while leadership focuses on more tactical and pressing issues,” says Greg Bloom, regional vice president at consulting firm Mercer and head of enterprise technology deployments for the mid-market. “By the time their ‘planning’ is done, it’s late, not data-based, and typically doesn’t incorporate the entire organization.”

Ineffective tools and technologies are often culprits of poor planning. Organizations rely on spreadsheets for this work, with data spread across multiple systems. Finance teams often need to manually gather and reconcile data for analysis.

“Many mid-market companies have disparate, legacy systems designed for back-office administrative work and reporting on the past versus monitoring and controlling the present and planning for the future,” says Bloom.

“The cloud is probably the single biggest advancement in planning, budgeting, and forecasting technology.”
—Gerald Harris, senior manager of enterprise performance management at KPMG Global

Continuous Planning

However, in today’s environment, businesses have to be aware and ready to respond to change, whether it’s identifying potential disruptions or competitive threats, complying with new regulations, or keeping up with evolving customer expectations.

That requires them to adopt a mindset of continuous planning, so they can adjust as conditions change. Traditional planning approaches such as static annual budgets no longer make sense.

The good news is that planning systems have become more accessible and affordable for midsize businesses. Gerald Harris, senior manager of enterprise performance management at KPMG Global, discusses this in the KPMG report, “Planning, Budgeting and Forecasting, An Eye on the Future.”

“In my view, the cloud is probably the single biggest advancement in PBF [planning, budgeting, and forecasting] technology,” Harris says. “Its lower cost of ownership has meant that middle-market companies, not just larger organizations, can now afford to deploy more efficient PBF process. There is now little excuse, and nothing to gain, from companies conducting their PBF activities using manual processes.”

Real-time Data and Analytics

Cloud-based planning systems—especially those that leverage data across operations in one system—have changed the game when it comes to data and analytics.

“Consolidating HR, finance, and payroll into one system of truth allows companies to capture both the content and context of everyday business events to deliver financial, operational, and management reporting from the same set of data in real time,” said Bloom. “This significantly improves the quality of data and reporting and gives them better insights into their business for planning.”

It also provides a great advantage when it comes to planning and executing growth strategies. People are often a company’s biggest cost, and having real-time metrics such as headcount, costs, revenue, and cash flow can help a company better understand performance, identify issues, and adjust and change when it matters.

This was important to AAA Northern California, Nevada & Utah (NCNU), which has become one of the largest geographic region auto clubs in the U.S. after merging with two other clubs in the last several years. “People are 50 percent of our organization’s spend, so having a unified approach to planning that encompasses both traditional finance as well as the workforce implications is important to us,” says Dustin Cramer, vice president of financial planning and analysis at AAA NCNU. “We now have both financial and workforce data in one system, and it’s live. We’ve moved away from the spreadsheet world, and with all the data in one system, we can see things more clearly. For example, if we push data into our recruiting module, HR can start feeding back on how realistic these planning goals are.”

Read part three of this blog series, which covers how to attract and retain the best talent to help your midsize company grow.