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Key Planning Trends for 2023 In the Face of Economic Uncertainty


“The will to win means nothing without the will to prepare”

Boston Marathon champion Juma Ikangaa

2023 is undoubtedly a challenging year to forecast from an economic perspective as the tempest of inflation, stock market volatility, foreign exchange challenges, hiring freezes, supply chain delays, and geopolitical conflicts are creating pressure for companies of all sizes and industries. As companies seek to make sense of a complex world and forecast performance, it is important to take full advantage of planning and forecasting capabilities to provide guidance. Of course, it is important to provide visibility and report to business stakeholders. But beyond the basics, what should you be thinking about as we prepare for a bumpy ride? Here are five key recommendations Amalgam Insights is providing for the business community.

  1. Build a planning process that can be changed on a monthly basis. Even if your organization does not need to plan on a continuous basis, there will be at least one or two unexpected planning events that happen this year that will require widespread reconsiderations of the “annual plan.” The “annual planning cycle” concept is dead at companies after the past three years of working through COVID, supply chain issues, and workforce shortages. This means that planning often has to be updated with new and unexpected data to support a wide variety of scenarios. Locking the plan to a specific structure, schedule, or level of data consolidation is increasingly challenging for companies seeking better guidance throughout the year. If you are not building out a variety of scenarios and tweaking changes throughout the year based on business issues and changes, your business is working at a disadvantage to more nimble and agile organizations.

2. Identify planning anomalies quickly. As businesses review their plans, they will find that they are off-plan more quickly than they have historically been. One example of this is in cloud computing, a spend area that is expected to grow 18-22% in 2023, far above general IT spend or the expected rate of inflation in 2023. Other commodities such as complex manufactured goods and food stocks may fall into this category as well based on production delays, logistical shortages, & new novel diseases interrupt supply chains. The ability to quickly identify spend anomalies that exceed budgetary expectations allows companies to affect spend, procurement, and technologies strategies that may further optimize these environments. By identifying these anomalies quickly, finance can work with procurement both to figure out opportunities to reduce spend and to find alternative providers that can either reduce cost or ensure business continuity to meet consumer demand.

3. Interest rates and the cost of money may incentivize longer sourcing contracts to lock in costs. This lesson comes from the sports world, where baseball players are getting long contracts this year. Why? Because the cost of money is increasing and baseball teams can’t play games without players, leading teams to seek the opportunity to lock in costs. Of course, to do this, companies must budget for the potential upfront costs associated with taking on new contracts. This is a story of Haves and Have-nots where the haves now possess an opportunity to lock in costs for the next few years and take advantage of the value of money over the next couple of years while the Have Nots struggling to visualize their spend may be locked in short-term contracts that will cost more over time. However, this ability to make decisions based on the current cost of money is dependent on the ability to forecast the potential ramifications of locking in cost, especially when those costs represent the variable cost of goods to meet the demand for consumer purchases and services.

4. Cross-departmental business planning requires a data strategy that allows organizations to bring in multiple data sources. Finance must start learning about the value of a data pipeline and potentially a data lake for bringing data into a planning environment, processing and formatting the data properly, and maintaining a consistent store of data that includes all relevant information for modern business planning use cases. In the past, it may have been enough for finance to know that there was a database to support financial and payment information and then an OLAP cube to provide high-performance analytics for business planning. But in today’s planning world where finance is increasingly asked to be a strategic hub based on its view of the entire business, planning data now potentially includes everything from weather trends to government-provided data to online sentiment and even social media. These new data sources and formats require finance to both store and interact with data in ways that exceed the challenges of simply having massive row-based tables of business data.

5. Look for arbitrage opportunities across currencies, geographies, and even internal departments. The valuation of mission-critical skills and resources can be valued very differently across different areas. 2023 is an environment where corporate equity and stock values are lower, the US dollar is strong against the majority of global currencies, and skills and commodities can be hard to find. These are both challenges and opportunities, as they allow FP&A professionals to dig into forecasted costs and see if there are opportunities to go abroad or to look internally for skills, goods, and resources that may be less expensive than the typical markets businesses participate in. Finance can work with sourcing, human resources, information technology, and other departments to proactively identify specific areas where the business may have an opportunity to improve.

As we plan for 2023, it is time to prepare sagaciously so that we are ready to execute when challenges and opportunities emerge. By planning now for a wide variety of potential situations, businesses can make better decisions in critical moments that can define careers and the future of the entire organization.