Business is a journey, not a destination. That’s why today’s enterprise needs to maneuver around many obstacles and adapt along the way. The key to surviving industry shakeups? Insightful planning.
Insightful financial planning and analysis (FP&A) is essential for C-level executives (especially the CFO) as they make decisions in hopes of improving their organization’s bottom line. But to most, improvement in FP&A is a fallacy.
Lack of insight into frequently changing markets, performance data and ineffective processes cause many top-level decision makers to question the accuracy of FP&A and throw their hands up in annoyance. Moreover, if finance tries to meet each demand, including the ones that offer little value, the quality of financial analysis will suffer and put a strain on already limited resources.
Fortunately, certain measures allow enterprises to improve its approach to financial planning, analysis and forecasting, as well as improve efficiency and accuracy to achieve better outcomes.
1. Cloud EPM
According to Gartner, 75% of organizations are seeking ways to improve the strategic impact and accuracy of financial planning and analysis data, connecting it with operational data from multiple business units or divisions to meet their goals.
In this regard, cloud-based enterprise performance management (EPM) systems offer a viable solution, offering real-time contextual intelligence and data availability that can be integrated back to legacy on-premise finance, pricing and transaction systems.
Modern EPM software also comes with built-in support for notifications, collaboration and annotations that resemble popular social platforms like Twitter and Facebook. As a result, cloud enterprise performance management suites are designed to be the catalyst that allows enterprises to grow quickly, breaking free of physical constraints while building a fast-expanding, location-agnostic organization.
2. Eliminate Duplicate Efforts
While being comfortable with rejecting other departments’ tasks is crucial, finance must also have a high level of certainty that it’s focusing on the right areas. This can be a challenge if other business units create their own analytics, complete with duplicate, conflicting and incompatible reports.
The workaround is to have the FP&A team define its own analytic role relative to other analytics hubs within the firm. Ultimately, each business unit adds its own findings to the analytic mix. Highlighting these contributions can help eliminate duplicated work and eliminate analytical stress.
Another way to cut through the noise is to partner with business units to create joint analysis areas that put together the strength of each department into a unified report that can be endorsed by every stakeholder. For an even better business impact, finance can recognize that analytics provided by marketing will do a better job in measuring client attitudes, while it can take the lead in ROI figures.
3. Educate Personnel On Making Trade-Offs
Although this sounds simple to pull off, teams struggle to implement this in their daily operations. Decision makers can establish a set of rules to help each member of the staff know when to scale back and when to offer in-depth analytics support. Not only does this enable the most important requests to be prioritized, but it also helps the staff prioritize their time better.
The same criteria offers cover to gain more time for the important requests by enabling the employees to say “no” regularly. The tiered system has to be the result of close collaboration between non-finance and finance business units.
By taking these measures, enterprises can significantly improve their financial planning and analysis.
