The concept of a Rolling Forecast is a hot topic in FP&A at the moment. Many companies attempt to implement it, but not all of them are successful. Statistics suggest that one in five of the organisations that implemented rolling forecasts recently have since abandoned them, because they proved to be more complex than initially expected. Additionally, they didn’t find enough value in this tool to continue using it.
However, a Rolling Forecast can be a powerful tool for FP&A if used correctly..
In an interview to GTNews, Larysa Melnychuk, Managing Director at FP&A Trends group, shares her knowledge on the current state of Financial Planning and Analysis in different countries.
Although it is becoming commonplace to refer to financial planning and analysis as FP&A, this is actually an American term and one that is still not widely used outside of the US.
It is true that around the world, FP&A goes by many names.
In a rapidly changing business environment, the traditional, out-dated budgeting mentality is being challenged more and more. Target negotiations, political games and biased planning processes cost companies a lot of money. These conventional budgeting practices are non-value adding and need to be abandoned if organisations want to stay competitive in this dynamic business environment.
While the process of moving away from a traditional budgeting mentality is painful and slow, it is happening around the globe. The question is, are we ready to abandon the traditional budget completely?
The past 5 years have seen significant transformations in the FP&A world.
I have been fortunate enough to have travelled extensively and seen these changes. I observed many restructures, system implementations, analytical insights and innovations, redundancies, frustrations, deadlines… In other words- I saw a lot of changes in the FP&A World first-hand: both successful and painful. I met a lot of FP&A professionals – hard working, exciting, inspiring and often burned out.
At the beginning of this year, I want to share my list of the Top 5 FP&A Trends to watch in 2106.