FP&A Week: Breaking the Paradox
October 10-13, 2023
By Eric Moses, Mergers and Acquisitions Lead - Americas at Shell
Have you created the perfect team that functions like Formula 1? If not, this article is for you. Building world-class FP&A teams is a journey, and sustaining high-performing teams that function like the mechanics on a fine Swiss watch is even more challenging. Still, it’s within reach with the right mindset, leadership, functional skills, and Business Partnering.
As we kicked off the meeting, the attendees were asked to introduce themselves and answer what is the most important skill of modern FP&A professionals. The following insights were collected according to the attendees.
We structured our discussion around four questions, namely:
Digital, Speed, and Hybrid work are the top trends shaping FP&A Roles in 2023.
Except for the abovementioned ones, the FP&A Board identified 7 key trends in 2023 and beyond that CFOs and Finance Directors need to be aware of to address the journey to world-class finance teams.
During the meeting, a few key discussion points were centered around expanding the role of CFOs and Finance Directors in the context of the emerging trends and ever-expanding industry, geopolitical, and post-covid risk and opportunities. Consequently, it has placed more responsibility on the FP&A and finance teams.
Technology has evolved to help accuracy levels, yet many teams still spend more than 45% of their time on non-value-adding activities associated with collecting and cleansing data, per the FP&A Trends Survey in 2022. We need to address data structure, master data, tooling, and integration, allowing more time to focus on value-creating activities.
Business and Finance leaders can’t apply the same level of accuracy in forecasting in today’s landscape and instead rely much more on Scenario Planning and a range of outcomes with the ability to act fast and remain resilient in several scenarios.
After this input from Larysa, the forum discussed key challenges related to FP&A teams. The below were cited the most frequently:
- There are often too many analysts and not enough others.
- Some FP&A team members still have a traditional Management Accountant mindset.
- We don’t speak the same language, i.e., data scientists don’t understand accounting, and accounting doesn’t understand data scientists. IT departments often also don’t understand the business. Therefore, it’s imperative to have knowledge sharing across teams.
Also, I would like to point out one of the key insights within the March Board meeting. One of the FP&A Board members, the FP&A Director, is working for the Chief Operating Officer (COO) and is uniquely positioned to bring the finance and accounting perspective directly into the business and focus on operational KPIs, driving the company’s outcome into financial metrics.
Also, the event attendees discussed the two Emerging roles noted below (FP&A Interpreter & FP&A Connector).
Ideally, building a modern FP&A team starts with self-assessment and, in some cases, 3rd party assessment of where the team is within the FP&A Maturity Model. It’s critical to understand the status of the team, its ambitions, and development needs. The FP&A Maturity Model provides robust structure & context and can be a key enabler to developing and delivering on your FP&A transformation journey.
Linked to practical steps in building a modern FP&A team, group work was the last item on the meeting’s agenda. Three groups were set up to discuss the practical steps.
The points of view were as follows:
The members of this group cited the following as success factors:
The Houston FP&A Board Members, who discussed the FP&A Business Partnering aspect of building the world-class FP&A teams, shared the following findings:
“Business Partnering is a team sport, essential to put the “business” back in Business Partnering to solve existing and emerging challenges together.”
Eric Moses, M&A Lead Americas at Shell
The 6 key takeaways from the 5th Houston FP&A Board are summarised below:
It was the second Houston FP&A Board meeting I attended, and my takeaway was that many of us are dealing with similar challenges, and there is no one-size fits all approach. However, the FP&A Maturity Model, the information about five critical roles, and the associated group work captured above provide a useful starting point. The diverse group of leaders from different backgrounds, countries, industries, and companies creates fruitful learning opportunities, including sharing of best practices which is a necessary step if we are to tackle the challenges in front of us as professionals and as world citizens to meet the challenges in the years ahead. Given the expanded role of our profession, we need to make our processes leaner, strategically aligned, action-oriented, and free from bias, with agility to reforecast and respond to changing situations. I leave you with “to whom much is given, much is required.”
I would like to thank the attendees and sponsors for engaging in an enjoyable and informative meeting, and I truly loved the atmosphere and networking!
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