The FP&A Trends Webinar: Digitised FP&A Business Partnering: How Technology Can Support It
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The FP&A Trends Webinar: Digitised FP&A Business Partnering: How Technology Can Support It
Click here to view details and register
By Larysa Melnychuk, the Founder and CEO of the FP&A Trends Group and International FP&A Board
Financial Planning & Analysis (FP&A) transformation has become crucial for driving organisational performance and maintaining a competitive advantage in today's rapidly evolving business landscape. However, according to the 2022 FP&A Trends Survey, only a third of FP&A's time is spent on high-value activities such as generating insights and supporting decision-making. Still, 45% of the time is spent on data-related problems. These problems do not solely stem from technology but rather from the lack of a data-driven culture.
To achieve FP&A transformation, organisations must master the soft dimensions that underpin the process and culture. This article emphasises the significance of leadership, functional roles, and Business Partnering as catalysts for FP&A transformation. By balancing soft and hard dimensions, organisations can effectively drive FP&A transformation and unlock their full potential.
Let us delve into each of these three dimensions in more detail.
Leadership is critical in establishing a data-driven culture enabling FP&A transformation. Influential FP&A leaders should set a clear vision for the organisation and inspire their teams to adopt new technologies and methodologies to enhance decision-making. The CFO's role in fostering a growth mindset that encourages innovation and adaptability is vital.
For example, Satya Nadella, Microsoft's CEO, exemplifies data-driven leadership and has transformed the company's culture to embrace data-driven decision-making fully. Nadella's approach, characterised by a clear vision, open communication, courage, humility, empathy, and the ability to energise teams, can inspire FP&A leaders to foster a similar data-driven culture. By adopting this approach, FP&A leaders can drive innovation, improve business performance, and unlock the full potential of FP&A transformation.
Effective Business Partnering and establishing a data-driven culture are vital for successful FP&A transformation. To achieve these objectives, FP&A professionals must excel in various functional roles. The five essential FP&A team roles include Analyst, Data Scientist, Architect, Storyteller, and Influencer.
It is a bridge between finance and data science, skilled in predictive technologies (AI/ML) and master data management. They uncover drivers and trends, integrate AI/ML/optimisation/statistical modelling techniques into FP&A processes, and analyse and present data.
This person plays a vital role in harmonising analytical models, technology, and processes into an ecosystem that enables data-driven decision-making and supports FP&A transformation. They possess IT, analytics, and finance expertise and thoroughly understand the business.
These people are responsible for data analysis, financial modelling, and providing insights to support decision-making. They oversee budgeting and forecasting processes and evaluate potential investments and projects to enable effective financial planning and strategy development.
This role delivers compelling insights and visualisations, making the story engaging and understandable for various stakeholders. They turn complex issues into simple insights and communicate the necessary actions to drive decision-making.
Finally, they are a key leader who uses their expertise in data and analytics to influence decision-making across the organisation, even without formal authority. They possess strong communication skills, emotional intelligence, and the ability to build internal and external networks to drive collaboration and alignment. The effective FP&A storytelling skills of the Storyteller and Influencer can help shift the organisation's mindset towards a data-driven culture, enabling more informed and strategic decision-making.
FP&A Business Partners are highly skilled finance professionals who act as strategic advisors and change agents, using data analytics and storytelling to optimise business performance. They possess various skills, including analytical and modelling ones, industry-specific knowledge and other soft skills such as communication and relationship-building, and technological proficiency.
During the COVID-19 pandemic, Medtronic's FP&A function demonstrated the value of agile Business Partnering and data-driven decision-making. The company's FP&A Business Partners leveraged their skills and expertise to adjust to the rapidly changing business environment quickly.
By treating data as an asset and facilitating a data-driven culture, Medtronic's FP&A function quickly identified areas of risk and opportunity, allowing the company to remain responsive to changing market conditions and leading to improved business performance and success.
FP&A Business Partners can help transform processes and systems, educate and influence others, and optimise business performance through valuable insights from their deep financial and business expertise. Their skills and competencies are essential for effectively driving business decisions and optimising organisational performance in times of uncertainty.
Balancing processes, data, analytics, and technology with soft dimensions such as leadership, communication, and relationship-building is crucial. Data is a key component in FP&A, similar to an atom in a living organism. We, as FP&A professionals, have to understand the organisation's needs and values to leverage technology and data effectively.
FP&A can help implement a data-driven culture by:
Successful implementation of these concepts has been seen in many organisations, such as Medtronic's FP&A function, which increased the speed of data-driven initiatives during the pandemic by mastering soft dimensions.
Below, I outline the five steps to help you embark on your transformational journey.
In conclusion, mastering the soft dimensions of leadership, functional roles, and Business Partnering is crucial for FP&A transformation success. By fostering a data-driven culture, developing essential FP&A functional expertise, and fostering collaborative relationships with Business Partners, organisations can navigate the transformation process and propel their FP&A transformation journey.
Access the related content below to learn more and follow me on LinkedIn for more insights on the best practices in modern FP&A.
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