It’s common for media and general conversationalists to refer to the COVID-19 pandemic as “unprecedented.” In some senses, it is: Almost no living American has lived through such an event. The world saw the deadly global spread of the “Spanish flu” over 100 years ago — but today’s world requires a whole new set of tools to deal with a public health crisis, including for businesses.
The unprecedented nature of the crisis means that business leaders don’t know what to expect when it is over. CliftonLarsenAllen’s financial scenario modeling tool, CLA Intuition, is meant to address this very need. Although it debuted a decade ago, a 2.0 version was just released that takes the effect of the novel coronavirus into consideration when building its models.
“Version 2.0 is tailored for the unique cash flow implications of the current pandemic,” explained Yassir Karam, chief solutions officer for the Top 100 Firm. “It also reflects our constant quest for simplicity. Functionality and decision-making is simplified, so that leaders can more easily develop strategic options for multiple scenarios.”
CLA Intuition 2.0 features interactive modeling dashboards to show the financial impact of decisions under various scenarios, which is helpful in the context of a situation with parameters that change daily. For instance, there is no clear end date in sight for social isolation and shelter-in-place orders, which also vary greatly by region; and new federal decisions around the crisis are being handed down at a rapid pace. Despite the availability of financial assistance through the Paycheck Protection Program and disaster assistance loans of various types, federal money is running out quickly and, at press time, many businesses were unsure as to whether they will receive government financial assistance or not. CLA Intuition can also provide an organization insight into the potential impact of new legislation, such as the CARES Act, on a business.
“Real-time scenario planning helps business owners and executive leaders understand strategic options in the face of an uncertain future,” Karam said. “Today, in the midst of the COVID-19 crisis, this need is more important than ever. A leader does not need to define the future; they simply need to explore various scenarios and consider the corresponding strategic options. This enables strategic decision-making around cash flow planning, financing options and operational changes, and sales, mergers or acquisitions.”
The solution was built internally with the firm’s own team of developers, and a cross-section of CLA team members that ordinarily help clients with scenario planning — the tool is not tied to any one service — work alongside the software development team to continually enhance the product. Similarly, groups of client-
serving professionals work with CLA’s solutions team to brainstorm new ideas for tools clients demonstrate a need for for the future.
Adoption of the new tool among firm clients is occurring apace, but Karam expects additional adoption as business leaders explore the forgiveness side of the PPP and Economic Injury Disaster Loan programs. CLA is also working on additional products, some for use by its team members to support the needs of its clients, and others that are client-facing and specific to the unique needs of certain industries.