Financial planning and analysis organizations must make internal changes in the process, technology, and talent.
FREMONT, CA: FPA activities take up about 10 percent more time and resources than they did a decade ago for a typical finance organization. Finance and accounting teams today still need to catch up.
Several trends have changed the playing field for FPA professionals in business units or product lines. FPA processes and teams, geared toward quarterly and annual cycles, have faced increased pressure due to the frequency and magnitude of economic volatility (for example, supply chain disruptions and labor shortages). Budgets, forecasts, and business plans require FPA teams to reconcile and consolidate growing business data to factor in relevant business insights.
Achieving next-level FPA status will require processes, technology, and talent changes. Even small steps to remake and mobilize the FPA organization can improve performance.
Leaders may look at multiyear transformation programs, but researchers have found that even small steps will lead to enhanced performance.
Improve processes to drive performance: CFOs and others in the C-suite should support FPA leaders in evaluating their existing processes to identify critical drivers of performance. An overhaul of the planning process for key decisions like pricing or production can lift organizational performance immediately, as the medical-device company did.
Invest in technology to deliver deep insights: Business process changes must combine with new technologies to show the value of the combined approach. FPA teams can help democratize data by creating action-oriented dashboards that integrate teams around a single source of truth, as the consumer products company demonstrated.
Develop talent beyond core finance capabilities: Business partners and challengers increasingly view FPA as a strategic partner. Food and industrial equipment manufacturers demonstrated the ability to develop talent that could identify key performance drivers specific to their industries, define the competitive dynamics affecting key financial trends, and influence the organization to change course to enable big moves.
FPA organizations often relegate themselves to basic information provision, consolidating data and spreadsheets and following a predictable, calendar-based rhythm. Digital tools and technologies allow emerging FPA teams to manage data more efficiently, share insights more quickly, and position themselves as crucial business partners. Traditional FPA organizations can optimize their own and their company's performance by emulating these next-level teams and focusing on two areas for improvement - execution in operations and strategy development.
Check Out This: Top Industrial Robotics Solutions Companies
