As your enterprise evolves, FP&A’s role in the business begins to shift. The shift from FP&A 1.0—which focuses on more traditional quantitative financing and budgeting practices—to Extended Planning and Analysis (xP&A) places finance teams in a more collaborative consulting and advising role to better meet your enterprise’s ever-changing needs.
We see xP&A as an expansion of traditional FP&A, or what we often refer to as FP&A 2.0. This is where your enterprise takes a more holistic and qualitative approach to your planning and analysis strategy.
Effective financial planning and analysis go far beyond creating a yearly budget. FP&A 2.0 brings together the people, process, platform, and partnership so finance professionals make their enterprise even more efficient.
With the right systems and automation in place, teams collaborate better and create meaningful partnerships across business units. Here’s how an xP&A strategy brings together people, process, platform, and partnership to increase efficiency in your enterprise.
Bringing People Together Across the Enterprise
People are the cornerstone of any efficient enterprise. While FP&A 1.0 focuses on making data-driven decisions by reviewing reports in the boardroom, FP&A 2.0 (xP&A) connects finance teams with other business units to better understand needs across the enterprise.
With a deeper understanding of how each business unit measures success and how budgeting plays into their needs, an xP&A strategy transforms your finance team from scorekeepers into trusted advisors.
Many businesses focus on making data-driven financial decisions, but those choices will fall flat without communication between business units. xP&A fosters empathetic decision-making to bridge vast gaps between Finance and other business units.
Improved communication across the enterprise helps finance and accounting professionals recognize necessary budget shifts before a situation becomes dire. Gaining the right insights and communicating directly with coworkers across the enterprise makes it easier for finance teams to provide meaningful guidance, add more value, and foster teamwork toward common goals.
Creating Processes That Make Workflows Easier
An xP&A strategy doesn’t only foster better communication, it makes every step of collecting, collating, analyzing, and reviewing data more effective. Creating the right processes for each of these stages makes financial planning more nuanced and connected to what actually matters to leaders across the enterprise.
Automation plays a key role in extending financial planning and analysis capabilities. Effective processes free up time and attention for people across the organization, so they aren’t spent running reports, collating data, or other unnecessary manual tasks. Reviewing and optimizing processes keeps teams on the same page and lets employees focus on more impactful aspects of their jobs.
Removing erroneous manual processes leads to a more effective partnership with other teams. Plus, optimized processes that take advantage of the capabilities of your technology enable higher performance and produce clearer, demonstrable results.
Using Your Platform to Your Advantage
FP&A 1.0 relies heavily on measuring and quantifying performance with data, but that’s clearly not all that platforms like Microsoft Power BI can do. If you know how to fully leverage the power of
Power BI, this platform significantly expands your financial planning and analysis capabilities. Power BI isn’t just a reporting tool, as we discussed in detail in this Power BI planning and forecasting blog.
The “platform” is truly an enterprise efficiency driver in your xP&A strategy. With the right tools and integrations, your team has accurate and relevant data immediately available at their fingertips. Once models and datasets are built and established, automated workflows and machine learning help teams see new insights and consider new approaches to business problems.
Technology unleashes the true potential of your finance team, empowering your leaders to approve resources and see the financial implications of their decision quickly and easily. A powerful platform optimizes processes through automation, ultimately allowing employees to focus on making strategic, impactful decisions that drive the business forward.
Fostering Partnership and Collaboration
The role and influence of Finance can change dramatically with the shift to FP&A 2.0 (or, xP&A if you prefer). Instead of running reports and supporting the C-Suite, xP&A allows finance teams to become more meaningful partners in goals at every level of the organization.
By building trust and communication, business units rely on finance professionals to engage with their priorities and understand the importance of their initiatives. From there, optimized processes built on a robust platform like Power BI create an environment where strategic choices are made from a place of empathy.
Knowing the priorities, the people, and the data intimately helps finance professionals play a more impactful role, offering financial guidance and strategy.
When your finance team steps into an advisory role, this new perspective offers a serious advantage over competitors. Decisions guided by a financial perspective—rather than dictated by a budget—help the business make fast, impactful decisions without compromising financial solvency.
Start Your Transition to FP&A 2.0
Business needs change quickly, and often the data doesn’t offer the full story. Expanding your current FP&A capabilities helps your finance team play a more strategic role in the enterprise and support other business units with empathetic, people-first decisions.
Creating an integrated xP&A strategy and uniting teams across the enterprise can be challenging. But, with our FP&A Visioning program, we create a roadmap to help your enterprise take your financial planning and analysis capabilities to the next level…FP&A 2.0.
FP&A Visioning empowers teams to work more effectively, reduce data siloes, make decisions more efficiently, and become a true partner in strategic decisions. Find out how our FP&A Visioning Program is building more efficient enterprise teams.