The world of financial planning and analysis has observed changes of such magnitude that they cannot be described by our traditional statistical and analytical models. In this age of frequent Black Swan events, the traditional business approach to operating on an annual budget and forecast is no longer effective. In order to deliver a competitive advantage to a company, modern FP&A function needs to be flexible and dynamic, be based on sophisticated analytics, examine life-time values of the products and services and encourage business partnering. This significant change in the role of FP&A function requires big cultural shift and modern change management techniques....
by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"
So you’re looking for a system that can help you improve your ability to plan and manage organizational performance. You’ve been using a spreadsheet for many years to budget and although it is infinitely flexible, you are worried about the integrity of the data and the fact that no one quite knows how the macros and VB scripts work. Oh, and you never seem to have adequate data to make ‘real-world’ decisions.
In looking through various blogs and magazine articles, you’ve heard that corporate performance solutions are the ‘in-thing’ and that everyone seems to be implementing them. So after doing some research you shortlist three suppliers who are now all going to tell you why their system is unique, the best and how much better off you would be if you choose them.
By Steve Morlidge, Business Forecasting thought leader, author of "Future Ready: How to Master Business Forecasting" and "The Little Book of Beyond Budgeting"
The London financial planning and analysis (FP&A) board recently held its first meeting of 2016, at which Steve Morlidge offered his insights on some of the challenges faced by practitioners in making sense of data and communicating it within organisations, and his ideas on how these shortcomings can be overcome. They will provide the basis for a forthcoming book ‘Present Sense’; a companion volume to his book on business forecasting ‘Future Ready’ which was published in 2012.
A few decades ago everything seemed so straightforward. When it came to planning and controlling businesses annual budgets were the only show in town. Managing performance simply consisted of comparing financial outcomes to these budgets on a periodic basis and using variance analysis to understand where and how deviations in performance had come about, to help the business ‘get back on track’. In this simple world of plan, actual and variance, simple presentational devices such as tables displaying columns of numbers sufficed.
By Neil Ainger, GTnews
Published first on http://www.gtnews.com and http://www.afponline.org/ in December 2013
The inaugural full meeting of the London FP&A Board confined itself to detailing the attributes required of an FP&A professional and the evening’s roundtable discussion produced a set of best practice recommendations detailing the necessary skills and mix of different personalities that should go into building a successful FP&A team.
We live in an era with an interconnected global economy, where constant change and uncertainty are taken as a given but planning for such an environment is not easy. Flexible and dynamic financial planning and analysis (FP&A) can help firms to cope. The financial crisis affected many companies and some of them became all too familiar with the spectre of unexpected ‘black swan’ events or ‘perfect storm’ market conditions that adversely impacted their business. Those that survived understand the value of FP&A.
Some organisations have not had enough time to re-align their cultures, systems and processes to suit the ‘new normal’ conditions, but they should as most chief financial officers (CFOs) and other finance professionals know that the ability to forecast results is the number one concern of modern business.