We can’t deny the vast content that’s being discussed with regards to Financial Planning & Analysis nowadays, notwithstanding the countless professionals graduating, being trained and working in such environments that require this skill set. In addition to this, the current drive towards digitalization of such activities has also heightened the excitement surrounding such work. However, the burning question here is if the output of all these activities satisfies the expectations of the end users? Have these expectations changed over time, and do we all as FP&A practitioners understand, appreciate it and deliver as expected consistently? 

Generally, we can agree that individual expectations with regards to almost everything surrounding us have changed over time. Heraclitus, the famous pre- Socrates Greek philosopher quoted “Change is the only constant in life”. Our expectations with regards to products we purchase, the services we get, kid’s academic performance, the organization we work for, and so forth, has changed. These expectations have somewhat increased to the extent that at some point, what’s expected is nothing less than perfection (hypothetically). It’s expected that an item purchased must be perfectly produced, packaged and sold, especially if it was pricy, if not we would be disappointed and may not patronize that organization again. Similarly, we are experiencing such changes in expectations in the area of financial analysis and planning. 

What’s fuelling this change in expectation

Fortunately, finance professionals can serve in a wide variety of areas within an organization doing financial reporting, management accounting, tax planning, business analysis, data analytics, credit, investment portfolio management, etc. However, some of these areas have had high demands over the last few years, especially the demand for professionals with specific skill sets and experience in business and financial analysis, and data analytics.  Accordingly, the price we pay these finance professionals has increased over the years, and so have the levels of expectation. Unfortunately, levels of expectations are somewhat proportionate to the price we pay for goods or services. So usually, if we pay a higher price for a branded product, we’d expect it to be of better quality. Thus, likewise, for these professionals.

In addition to the price that’s being forked out to pay these professionals, the availability of an abundance of data has amplified this expectation exponentially. This may also be related also to the price organizations pay for investing in the latest IT technology in keeping their businesses competitive. As organizations digitize and digitalize their processes, data with regards to their organization’s financial health, customers and suppliers activities, payments, banking activities and so forth, are made readily available to employees within the organization. Furthermore, this information reaches these users efficiently and accurately, sometimes on a real-time basis, which in turn, exerts pressure on these employees to turnaround any form of analysis with speeds matching the availability of that information. 

In the past, when information and data were limited, such analysis was very much explained by a limited group of senior and experienced employees or managers that would have had years of experience in any specific field and could provide a fairly convincing reason for variances or trends. They would make a calculated forecast based on their vast and rich knowledge, and it would be taken as good. However, advances in technology have made such information readily available to any employee tasked with such analytical roles, thus making it less dependent on any particular employee. This also serves to minimize the risk of having such information concentrated or limited to any one individual in an organization, making it a lot more sustainable. 

What’s expected

Hence, finance professionals, especially in the areas of analysis and planning, are the ones who would feel a load of this additional expectation, as they’re expected to correlate the financial information to the non-financial data. The need to explain and justify variances or forecasts, by linking the financial numbers to key business drivers and data trends is the minimum expectation. Such linkages will need to be clearly made available to users upon request or at presentations, in order to have favorable or positive outcomes. Presenting such information in the form of relative charts and diagrams, and giving recommendations, do add value in such forums. 

For eq. a basic financial analysis with regards to changes in sales volumes of a specific period would normally be presented in terms of percentage changes over that period, either in terms of sales value or number of products sold. The additional analysis expected would probably include a detailed association to sales personnel, points of sale, demographics of population, seasonal factors, stock availability, delivery times, etc., and possibly made available within a short period of time, perhaps within a day or two (don’t be surprised if the request is for the same day) and with a recommendation moving forward. 

Dealing with this rise in expectations

To do all this, it would require an analyst to deep dive into the vast sea of data available and make inferences that make sense. A well-structured IT system would possibly assist analysts to see the linkage via queries done through a structured reporting platform, but, not all organizations have this. Either way, expectations are that analyst need to be able to connect the dots and explain in detail the variances, trends and be able to use such data to make recommendations and forecast future trends for planning purposes.  

This is where the expectation builds for those involved in such analytical roles. There is a need to understand how to connect the dots fast so that the information can be relayed timely and accurately. For new joiners, the learning curve is extremely steep, as they’ll need to learn and adapt fast. To do this, having good interpersonal skills to assist in building good relationships within the organization to seek information and develop a good understanding of the business, having some basic knowledge about IT infrastructures and tools, and identifying the various sources of data within the organization or externally (not to mention its reliability too) is imperative. For existing or experienced employees who take on roles in analysis and planning, the steep learning curve would be mostly focused on understanding IT technology, sources of information and its availability, and the various tools used in analysis and presentations. 

Be adequate, preferably desirable

Thus, it is vital for any professional in this field to appreciate this expectation and work towards setting themselves up for the challenges ahead. Expectations can be managed effectively if it’s approached correctly taking into consideration the reliability of the information produced, and the experience of the users during the entire process of this activity. Professionals need to understand that the minimum requirement is to deliver outputs that are ‘adequate’, anything less is considered inadequate and could affect a user’s perception. However, if an analysis is delivered to a ‘desired’ level, you would attain unwavering support. Such levels of adequacy and desirable can be somewhat subjective, thus, it does require a fair bit of assessment of your surroundings.