You’ve been paying attention. You have an understanding of how financial planning and analysis (FP&A) drives efficiency and business insights in your organization. You also want to introduce its application to your team, organization, and leaders.
But what does the FP&A process flow look like? And, how can we determine FP&A best practices?
The workforce and technology are changing so fast that it makes your head spin. To complicate matters even further, we are all working against the pandemic environment. Now is not the time to improvise…it’s time to strategize with an FP&A process and framework that has been tested, validated, and delivered.
FP&A Process Flow From a People Perspective
Most financial leaders embrace the advantages of leveraging business processes as a means to clarify team member goals, furthering the organization’s overall objective. When your organization has the proper framework in place, you ensure all resources are optimally exercised.
In FP&A, it delivers when you move your accountants and financial experts beyond scorekeeping to valued advisors within the organization. Below we will cover three steps in triggering this transformation, validating its success, and delivering results.
1. Talent Management
The first key focus is talent management. Will your brilliant and capable accounting and finance professionals stay at your organization for 30 years? No.
Consider today’s talent. By 2025, millennials will make up 75% of the overall workforce. Imagine an entire generation that lives on their phones. They expect to take an active role in decision-making, they desire feedback, and they have an advanced entrepreneurial mindset. This demographic shift may unnerve some.
How can organizations evolve strategies to target and retain millennials? Remember that millennials want to be part of the action. Consequently, talent management means developing strategies to target and retain this new workforce. And they need to do it right now.
2. Retention Strategies
You have experienced the value of engagement across the enterprise. This holds true in accounting and finance. The way to retain millennials, as well as other demographics, is by appealing to their skillsets.
You might ask your talented accounting and finance person, “Hey, please go look at our processes and find a way to make those more efficient either through technology, business partnerships, or drawing better business insights.” This action gives a call to action to do something, engage, and deliver.
Get them involved in FP&A responsibilities that matter by bringing them into conversations and building new partnerships. Introduce them to your department leaders in sales, marketing, or operations.
These business areas are vital for effectively leveraging their skills, passions, and talents. Team members will gain awareness of those departmental challenges and opportunities so they can make an immediate and significant impact.
3. Consistent Performance Management
The third focus is consistency across your business metrics. Develop an overall strategy that will guide decisions through data, partnership, and tracking business results. Learn to become the stewards in the business that have the pulse on opportunities, challenges, risks, and developments.
This methodology and framework is a fundamental shift for traditional accounting and finance teams. For future success, organizations must hone the people aspect and cultivate the FP&A leaders of tomorrow.
FP&A Evolution From a Process Perspective
From the FP&A process perspective, you want to explore how your strategic and tactical process improves data-driven decision-making. You may already have processes in place that work well. By all means, incorporate those processes as you optimize your data and business intelligence, with the end-goal delivering business results.
To boost value and speed from FP&A teams, developing and executing these processes takes planning, dedication, time, and patience. Partnering with someone who has implemented and executed these strategies successfully will help you accelerate introduction, implementation, and integration—rather than starting from zero.
AI & ML: the Future of FP&A (and the World)
In every discussion of the FP&A process, the subject of artificial intelligence (AI) and machine learning (ML) inevitably comes up. Whether we’re ready or not, AI & ML are going to fundamentally change how accounting and finance teams do their job, provide value, and decide where value is focused.
If you take all of the processes that the accounting and finance team maintain, I tell you with complete confidence that AI and ML solutions will eventually deliver 70-90% of the work they are focused on. This sounds scary, right?
However, the goal of AI and ML is to incorporate humans in the right moment to leverage their skills, passions, and talents on high-value activities. Processes are the foundation of data-driven decision-making. In my five-step process called the “decision cycle,” if executed correctly, data analysis and insights deliver long-term success…but it must be rooted in a solid framework.
In terms of AI & ML adoption in relation to people, organizations should focus on the fourth to fifth transition in the decision cycle, which is knowledge to decision.
FP&A value must go beyond churning and burning through Excel and instead get more involved in developing strategic partnerships, cascading knowledge, and continuous learning. Delegate the low-value activities (process to information) to AI and ML. And leave the knowledge to decision-making to your FP&A team.
This is what we are asking of future accounting and finance professionals—let’s call it FP&A 2.0. It is a departure from FP&A 1.0 (Financial Planning & Analysis) to FP&A 2.0 (Financial Partnership & Advising). To remain relevant, the FP&A team must upskill, moving beyond the scorekeeper and stepping into the role of the valued advisor.
FP&A 2.0 is Already Happening
The pandemic way of life has taught future-proofing organizations that they will live or die by their speed and agility to identify, analyze, and act on data to make decisions. The pandemic has forced organizations to be more remote, forge new partnerships, and adapt their teams to the organization’s objectives rapidly and frequently by implementing continuous learning and feedback.
A recent LinkedIn Workforce Confidence Index shows that millennials are the most confident age group in the face of the pandemic while Baby Boomers are the least confident. Certainly technology is key here, with millennials more deft to remote work.
The pandemic has accelerated technology and data-driven decision-making. It’s time your organization answers the call by first focusing on your people, then your financial planning and analysis process. Cultivate a team of valued advisors instead of scorekeepers who leverage technology, partnership, and action-oriented data-driven decision-making.
Are you prepared to reach FP&A 2.0? Looking to take your team to the next level? Passionate about driving change and making an impact? Then, get started right now with Collectiv’s FP&A Visioning Program.