The Power of Adaptability: Transforming Financial Planning
The construction sector has weathered some significant storms in recent years. As the economic headwinds continue, we look at how scenario planning and stress testing, are relieving the pressure on housebuilders and offering liquidity for future financial resilience.
There are some well documented challenges facing the construction sector. The pressure of higher interest rates, resilient inflation, weaker consumer confidence, increased supply chain costs, regulation, and an overall market slowdown, are impacting many of our construction clients.
At times of financial pressure and change across the sector, our clients see the value of a connected view of these many impacts using extended planning & analytics models. An outlook that is crucial to the agility and continuous management of their company’s financial health and resilience.
Over the long term, the decisions they are making today, will significantly impact recovery speed and cap their future financial liabilities.
Scenario Modelling – “The goal of forecasting is not to predict the future but to tell you what you need to know to take meaningful action in the present”.
Stress testing can help to identify weaknesses and risk in financial models. By constructing an integrated model that connects various elements such as profit and loss statements, balance sheets, operational data, and workforce planning, among others, businesses gain the ability to instantly observe the downstream effects of forecast driver changes. This means that even a minor adjustment, such as altering the date of expected completion, can result in automatic shifts in associated revenue and costs throughout the entire model. This seamless connection enables housebuilders to assess the comprehensive implications of their decisions in real-time and make well-informed choices accordingly.
For instance, IBM Planning Analytics and Anaplan both operate on an in-memory platform, ensuring that any modifications to the model yield instant results. This capability not only enables swift responsiveness but also enhances scalability, allowing businesses to incorporate additional details or data for improved accuracy.
Agile planning with coherent and good-quality data leads to greater business resilience
Housebuilders need to act quickly to accelerate and improve longstanding structural issues within the business, putting operational efficiency at the top of the transformational agenda.
Sempre Analytics have developed connected planning solutions for Crest Nicholson, Countryside and Keepmoat that deliver data insights from Plot Production planning (PPP) to human resource planning:
- Cost fluctuation impacts on forecast revenue modelling
- Development Cashflow impacted by price change(s)
- Reporting projects [forecast & viabilities] by region and group
- Supply Chain expenditure and risk models – Group and Joint Ventures
- Coherent view of Site regulation and quality process and compliance reporting
- Improved Customer service for project progression through inspections to QA
- Market data impact(s) on reservations
- Client extra’s and negotiation with real time profitability views.
Sempre have also developed Field View Analytics solutions that enable companies to access and utilise site image data for Laing O’Rourke, MMC Gamuda, Aspire Defence, Crest Nicholson, GallifordTry and Berkeley Group
If you would like to find out more about Connected Planning and how it can relieve financial pressures in your organisation book a – Connected Planning Workshop
About the author
Richard Abraham, an accomplished leader in House Building & Construction, excels in driving revenue and delivering innovative solutions for clients and partners. With a proven track record, he spearheads companies towards achieving strategic objectives by leveraging Business Intelligence, Financial Performance Management, and advanced data analytics. His expertise spans navigating the complexities of past, present, and future insights. Through a career marked by notable achievements, Richard is dedicated to maximizing success in the dynamic landscape of the construction industry.
