Using EPM to navigate the COVID-19 crisis

80%

of CFOs surveyed worry about the financial impact on operations, liquidity and capital resource
30%

are concerned about not having enough information to make good decisions

Source: PwC’s COVID-19 CFO Pulse Survey

In the past few months, our businesses have been severely disrupted by the COVID-19 pandemic. In a previously published article, we presented how CFOs can prepare for the "new normal" by defining an exit strategy that can cope with the constant uncertainty. In this article, we shift our focus to how to navigate the uncertainty of the upcoming months.

The COVID-19 crisis sharpens and widens the challenges of the CFO. The vast majority of companies are looking for cash and working capital optimisation, focusing on productivity and investments. More than ever, Enterprise performance management (EPM) is the tool the CFO uses to navigate the company through muddy financial waters. A well-designed EPM framework is essential to measure the extent to which a company realises its strategic objectives.

The EPM concept is not new. However, many companies still struggle to use it to generate valuable forward-looking insights. Too often, companies aren’t connecting their various plans together and seem to redo the same plans again and again, leading to lengthy processes and hampering their agility.

As most countries across the globe are rolling out their COVID-19 exit strategy, it’s crucial for companies to sharpen their ability to collect relevant data, model it and draw scenarios from it. Only companies that succeed in running connected scenarios will properly understand where they can go and what it will take them, their people, customers, processes and systems to get there.

Edging the COVID-19 crisis

EPM to navigate through the exit

With the aim of helping companies to manage business performance at each level of their organisation, EPM provides a competitive edge by allowing to simulate and quantify COVID-19 related measures on performance and hereby reacting adequately.

Why does it matter today?

Increase predictability in times of uncertainty
Enhance reaction speed to COVID-19 impact
Facilitate informed decision-taking
Improve ownership on decisions

Focus on qualitative planning

PwC can support you on ramping up your forecasting ability.

Starting from a generic simulation model predicting cash flows and income statement, embedding key business drivers affected by a catalog of COVID-19 related measures
To build a company-wide tailored model using corporate relevant business drivers and embedding corporate specific assumptions
And allow what-if simulations on exogenous factors (i.e. client and/or supplier disruption) and on endogenous factors (i.e. corporate decisions)

Our approach

We have developed a 3 steps modelling approach designed to quickly set up the predictive ability for your company.

Through this model, we make sure that within a month, you have the right tool tailored to your needs to perform your simulations and to navigate through the crisis.

How we can help

At PwC we are working closely with our clients to help them respond to COVID-19 and prepare for the “new normal”. Our Management Consulting Finance team has significant experience in helping a diverse range of clients in different industries on complex Finance (and beyond Finance) challenges.

Starting from your vision and the impact that COVID-19 has on your business, we can help you steer through the crisis to set you on the right track in turning this crisis into opportunity.