Best-in-class FP&A teams and how to build them – a new report from FP&A Trends | Unit4
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Best-in-class FP&A teams and how to build them – a new report from FP&A Trends

The changes of the last two years – and their unprecedented speed and scale – have thrust Financial Planning and Analysis to the forefront of many organizations’ strategic priorities.

FP&A is increasingly growing beyond its roots as a discipline within management accounting, becoming a key part of integrated business planning for organizations across all sectors – Gartner has even recently begun referring to it as xP&A to refer to its increasingly ubiquitous status.

These changes have also been accompanied by an accelerating rate of digitization – giving FP&A the ability to plan with data coming from the entire organization, rather than just the finance department.

To cope with the rate of change, FP&A leaders across the world have been adapting rapidly both to new realities, and new demands from management. This means FP&A teams are experiencing a shift in their core competencies – moving from being a part of the finance organization to a multi-faceted discipline focused on corporate decision making.

Our friends at FP&A Trends recently conducted research – including interviews with 25 top FP&A practitioners and thought leaders, and cases studies from the world’s largest FP&A network – to capture how FP&A teams and the roles within them are changing.

Here are some of the top highlights from the report.

1. FP&A is increasing in strategic importance

FP&A is rapidly becoming of central importance to driving big-picture organizational strategy. Interviewees describe it with terms like a “connector”, the “wise man”, the “conductor”, the “therapist” – even “ a digital X-ray machine.”

This strategic shift is a consequence of increasing digitization, which is permitting FP&A to evolve beyond a reporting function and into an analytical function.

As technology is deployed to automate traditional repetitive tasks like period-end reporting, more focus can be transferred to higher value-added tasks like insight generation that supports organizational decision making. In line with this, FP&A has also moved from dealing mostly with financial data to a near 50/50 split between financial and operational data.

And some think that in the future, this split will be 80/20 in favour of operations.

FP&A will require a great deal more data specialists, analysts, and strategic thinkers in the future. This also means that the modern FP&A function can work as a guide and mentor to business leadership, helping to drive more intelligent strategy.

2. The impact of technology can be felt everywhere

Technology is coming to dominate FP&A as a function, and this report sees its effects as groupable into three major themes:

  1. Collaboration – technology is being used increasingly to make FP&A teams more cohesive and more integrated with other business functions.
  2. Analysis – predictive and prescriptive analytics, backed up by AI and ML, are being deployed to enhance the quality of insight available to decision makers.
  3. Automation – tools and techniques that reduce the time spent on lower-value tasks and processes are leading to increases in efficiency and productivity.

This means that tech skills are now a prerequisite for everyone in an FP&A team to help you leverage the tools you have available to their fullest to support more agile decision making.

3. FP&A and business partnering

In order to actually have an increased impact on business decision making, FP&A teams need to be closer to the rest of the business than ever before. “Business partnering” – working closely with leaders to enhance corporate performance – will therefore be a critical part of the future FP&A team. Business partnering is a role that requires a careful balance of analytical and insight-development skills with softer relationship skills and “emotional intelligence”, allowing your business partner to influence decisions without making them, and to communicate vital information and justify the recommendations your team makes with the hard facts of the data.

4. Team building and management must be future-focused

There’s a global shortage of the skills required for the modern FP&A team – so hiring the talent you need externally is likely to be difficult (not to mention expensive.) It’s also difficult to assess the growing number of soft skills your new hires will need through a traditional interview process.

Moreover, since the skills you’ll need to build an effective team will only continue to evolve, it may be more advisable to cultivate new skillsets within your existing team. FP&A Trends’ survey, interestingly, does not cite formal training as a key element in skills development, with respondents instead focusing more on on-the-job training and mentoring. However, these approaches don’t just mean throwing people in the deep end – they require a strong culture of camaraderie, support, continuous improvement, and open and honest feedback.

More than anything else, hiring and upskilling your team must be done with the future in mind – based on a career path that can attract good people, keep them around, and which emphasizes the strategic importance of the roles and skills learned on the job – which will likely groom people for the senior leadership positions of tomorrow.