This article is about a basic understanding of main value creation concepts and how those impact the work of FP&A. We take a look at value creation from a financial lens – the DuPont analysis framework for calculating return on investment (ROI).

A study showed that organisations with high bonus payouts performed much better financially than those who did not pay high bonuses. This is why incentives can be seen as a financial tool to drive better performance.

FP&A helps create sources of future value whilst being on top of how much value is being created at present. Neither of these two things is as easy to measure at any one point in time. So, how can we answer the question “is FP&A delivering what is expected of it”?

When we talk about performance measurement, KPIs are a common tool.  It can be a financial measure or an operational measure. However, in recent years, KPIs seem to have fallen out of favour because it fails as a useful indicator of business performance. Should we abandon KPI? This article looks at the importance of designing and defining appropriate KPIs in performance measurement.

Setting targets and defining KPIs is one of the key tasks of FP&A professionals. Defining KPIs is tricky. When properly done they can really drive performance, but sometimes it is the other way around. We see this in the following practical example of the application of the Logical Thinking Process methodology for problem solving. 

Kaplan and Norton’s Balanced Scorecard is a familiar concept, still widely used today, often falling to FP&A or Strategic Planning teams to create and then monitor. This process can be very challenging and problematic to deliver. This blog focuses on some practical observations and tips regarding the implementation of a scorecard, designed to help you get buy-in from the rest of the organisation.