Real-Time Financial Planning - Three Key Challenges Facing Housing Associations

Our recent user research at www.blox.so into housing association finance planning has revealed three significant barriers facing finance teams who are thinking about implementing real-time planning in their organisations.

If you're working as part of a large housing association finance department you may be familiar with some of the following pain points...

The challenges

1. ACCESS TO PLANNING TOOLS

Free access to your main enterprise planning tool is probably limited - there’s usually at least one specialist team who do the planning with their own enterprise level software application forcing your outlying finance teams to resort back to manual spreadsheet models.

This can lead to delays updating data and an unnecessary waste of scarce staffing resources. For example, your housing scheme has slipped back three months and you now have to ask your whole team to recalculate everything again, manually.

In a heavily regulated sector such as housing which needs to meet strict requirements from regulators, a low friction approach between teams would be highly desirable as it would aid the speed in which proper checks could be made, but in reality, an inertia for a effective solution between finance groups and lack of permissions for key planning data is blocking any real-time planning vision.

Sample regulator requirements could include:?

FCA - A return for the Financial Conduct Authority in the UK

SDR - A return for how many unit numbers have you got and what type of units

FFR - A thirty year financial plan, submitted to the regulator every year

SOLUTION

Think about empowering every member of the finance team with the access they may not traditionally receive. In the modern business world, financial decision-making requires a collaborative effort, and limiting access can hinder innovation and efficiency.

Access to a cloud-based portal with role-based permissions for all finance team member could integrate seamlessly with the specialist planning team's software, incorporating automated data updates, collaborative workflows, and real-time reporting features. Additionally, streamlining permission processes, fostering cross-functional teams, and conducting regular process audits can promote a culture of knowledge sharing and efficiency.

Most of the latest modeling software include secure 'sandbox' features that enable your team to strategise and simulate scenarios without jeopardising your critical data integrity, this can then speed up timely changes to your longer term strategy and planning.

2. OVER COMPLEX MODEL STRUCTURES

Opaque and over complicated structuring of your model structure can lead to significant errors calculating your cost units which you know are wrong, but with a spreadsheet approach can be very hard to track down.

Accurately calculating something as simple as a balance sheet can turn into a costly and time consuming process with your team struggling to understand how the calculations relate to your indicators and items.

When changes are required, for instance changing the time horizon of a plan, a spreadsheet approach is not ideal because it lacks the flexibility of multi-dimensional modeling techniques which would make it very hard to maintain an accurate, real-time plan.

Modern user-friendly interfaces can now enable users to easily delay their financial plans by a month or a year and instantly visualise the resulting impact on their financial projections, all without the need for manual recalculations and adjustments, would be a game-changer. Such tools can greatly simplify the process and alleviate a significant amount of the associated challenges.

SOLUTION

Try and more use of software that have dimension creation and editing capabilities built in. Spreadsheets will always be an essential tool for finance teams in housing but modern FP&A software can make creating and editing with dimensions and items much easier to understand, whilst the ability to track calculations and checking for errors is greatly enhanced.

Dedicated housing software with an intuitive interface and user tested task flows can make it much easy to scale, amend and understand your model which you can then share with other teams who are not familiar with your over complicated model structure.

Achieving simplicity in software user experience often demands extensive hours of research, meticulous design, and rigorous user testing to yield optimal results. Fortunately, many contemporary planning software applications have effectively employed UX design principles to enhance and streamline the experience for financial users.

“That’s been one of my mantras—focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” Steve Jobs

3. KNOWLEDGE SILOS

You may have isolated pockets of knowledge within smaller teams in your organisation - so-called 'knowledge siloing' which make a real-time planning strategy virtually impossible. They are probably already slowing down the decision-making processes within your organisation and critical insights not being shared efficiently across teams or departments.

Housing association finance teams require answers to a lot of dynamic questions as fast as possible (ideally in real-time) e.g.:

• What is the best use of our finite resources considering the changes that happened today?
• How do we demonstrate value for money after this report was published?
• What's more financially beneficial for our organisation versus what's actually the socially right thing to do?

By creating a complex network of spreadsheets available to a chosen few finance experts you are restricting your ability to scale, adapt and plan in real-time.

SOLUTION

It's well worth emphasising to any teams that may be displaying signs of knowledge siloing that the adoption of a new process not only enhances efficiency but also liberates valuable time and resource for their own team.

You should reassure them that the time saved through this new process can be reallocated to other critical tasks that contribute to the overall success of your organisation.

A fresh approach can initially seem like a significant investment of time and effort but would make everyone's lives a lot easier and the planning process less brittle and error prone in the long run, so a big win for the teams and the organisation.

"Siloed knowledge creates blind spots in organisations, preventing them from seeing the bigger picture." Stewart Brand

JOIN OUR RESEARCH

If you are interested in contributing to our research into Housing Association FP&A solutions, pain points and partnerships please comment below or get in touch via LinkedIn.

I hope you gained something useful from our research so far - more to come soon, please like, share and follow if your enjoyed this article and value any future insights from our team.

WHO ARE BLOX?

Blox aims to supercharge your financial planning and modelling.

Craft powerful financial models, automate data updates, collaborate and plan seamlessly and reclaim hundreds of lost hours spent on tedious tasks.

Become the strategic finance powerhouse your business needs with Blox and take planning to the next level visit www.blox.so

Checkout our blog for further insights on effective planning.