FP&A: transform your teams from planners to trusted advisors
The events of the last year have caused a shift not just in the plans organizations have made for the future, but the way in which they make them. Financial Planning and Analysis (FP&A) leaders and teams are seeing increased pressure to evolve their offering to provide more comprehensive scenario planning and strategic-level input. But achieving this will itself require a step-change in the way FP&A works – one that can’t be achieved with yesterday’s tools and methodologies.
Financial Planning and Analysis has had an important seat at the table for some time when it comes to the strategic future of the enterprise. But sometimes our ability to support operational management is limited by the time we are forced to devote to gathering and verifying data from the business.
Not only does this work absorb resources that could be devoted to more valuable tasks, if data isn’t current and its accuracy is disputed, any analyses based on it will be undermined, and so FP&A’s effectiveness in supporting decisions is diminished.
To provide meaningful insight FP&A teams must have ready access to business-critical data, tools with which to interpret it, and people capable of creating the scenario plans that enable the C-Suite to focus on what the business should be doing. Making these decisions needs clear sight of what the available operational levers are, and what each might do in any given situation, with a comprehensive understanding of the bets being placed as each lever is pulled.
To be a trusted business advisor, while the need for scenario planning accelerates and the corporate data environment becomes ever richer and more dynamic, an FP&A team must break from its dependence on spreadsheets. It’s worth saying that the spreadsheet remains an effective analytics tool, but the demands of a collaborative workspace mean that maintaining spreadsheets becomes an industry in itself.
For instance, if you’re trying to make judgements not only about profitability, but also various non-financial KPIs, even the most capable team will not be able to provide a clear picture in Excel without a significant delay. Regardless of the assignment, speed and accuracy are critical and a spreadsheet simply can’t deliver the dimensionality and interactivity necessary for effective analysis.
Instead of continuing to labor under 20th century FP&A limitations, teams can now embrace technologies to transform. In October 2020, the analyst BARC in their Topical Survey, Sound Decisions in Dynamic Times, found 56% of organizations are actively working to introduce and modernize their software and as many as 76% of leading organizations now intend to use specialist software for corporate planning, simulations, and scenario analyses.
These tools allow you to analyze data from different perspectives, identify time-series trends and set up alerts when values exceed set parameters. Statistical techniques are now embedded into applications that allow simple forms of correlation. You can use these to build predictive driver-based models. This will allow your organization to access more data (particularly unstructured data and data from outside your own systems), synthesize better insights, and accelerate your decision making.
For those of you working for enterprises that span different geographies and time zones, they can also bring your teams closer together. Especially with cloud-based solutions that can be accessed in any language and on any device. This advanced flexibility and collaboration will allow your people to leverage new capabilities – embracing continuous planning beyond budgeting and rolling forecasts and providing automated reports and alerts to managers.
Leveraging new technology can have huge transformative effects on your teams’ ability to deliver useful insight and modelling to the organization – and radically elevate the level of trust and respect they command as a result.
At Unit4, we’ve seen organizations experience a 90% reduction in the time taken to produce reports after adopting their solutions. And reaping the benefits associated with this increase in their ability to provide useful information to their businesses.
The latest digital tools create an opportunity to reaffirm the FP&A department’s status as a trusted advisor to senior leadership. But it also presents the opportunity for FP&A activity to work efficiently across the whole business, and not just in the confines of the finance department. Helping to further align finance with the needs and structure of the organization, its culture, and the needs and values of key stakeholders. This new role for FP&A heralds an organization that’s smarter about itself, can make more innovative decisions, and focus more explicitly on the things that impact performance – today and tomorrow.
Learn more about how Unit4 can help your FP&A teams
To discover a roadmap for elevating your teams from planners to trusted advisors, click the link below to download our white paper on the subject. You can also check out more about our FP&A solutions here and book a demo to see what they can do for your teams here.