The FP&A function has certainly evolved from a tactical to a more strategic function over the past five years. A perception that has become relatively common is that most FP&A teams have the resources and support they need to deliver meaningful strategic value. I partnered with FP&A thought leaders Larysa Melnychuk, and James Myers to develop the FP&A Empowerment: The Evolution of Technology & Trends survey in part to find out if this perception is a reality. Are FP&A teams empowered to deliver strategic value across the enterprise?
The results of the FP&A Empowerment: The Evolution of Technology & Trends survey indicate levels of data, analytical, and technological immaturity that make me lean towards classifying this perception as a myth. The survey results were so surprising that I used polling questions in two FP&A focused webinars in Q4 of 2018 to support for the results or to offer caution in making inferences based on the survey results.
In terms of data maturity, the struggles of the FP&A Empowerment: The Evolution of Technology & Trends survey respondents are depicted in the chart on the left side of Figure 1 below. Eighty-eight percent (88%) of companies struggle with data availability and quality as only twelve percent (12%) of respondents have access to the right data in a timely manner. The data maturity of companies attending FP&A focused thought leadership webinars in Q4 of 2017 is not any better. Only 11% of the 183 of webinar attendees answering a polling question relative to the data maturity at their companies reported that decision makers have access to the right data at the right time, data nirvana. The webinar company sample has even more prevalence of data overload at 21% versus 10% for the FP&A empowerment company sample. The data from the webinar polling questions does not contradict the general level of data immaturity at companies evident in the results of the FP&A Empowerment: The Evolution of Technology & Trends survey.
A survey question designed to help assess the technological maturity of companies taking the FP&A Empowerment: The Evolution of Technology & Trends survey was: How modern are your company's reporting and analytics tools? The surprising preponderance of technological immaturity at the companies of survey respondents is depicted in the chart on the left side of Figure 2 below. Forty percent (40%) of companies are leveraging only a basic (22%) or very basic solution (18%). Companies answering the same question posed as a webinar polling question also have a prevalence of technological immaturity (depicted in the chart on the right side of Figure 2 below). Forty percent (47%) of companies are leveraging only a basic (24%) or very basic solution (23%).
In assessing the level of analytical maturity of companies responding to FP&A Empowerment: The Evolution of Technology & Trends survey and FP&A webinar polling questions we leveraged the FP&A Analytics Maturity Model developed by the International FP&A Board depicted in Figure 3 below.
The surprising degree of analytical immaturity at companies represented in the results of FP&A Empowerment: The Evolution of Technology & Trends survey is depicted in the chart on the left side of Figure 4 below. Fifty-five percent (55%) of companies reported being in a developing state, basic (13% or developing (42%). Furthermore, only 17% of companies reported being in a leading state of analytical maturity, advanced (14%) or leading (3%). The general level of analytical maturity of companies attending FP&A focused thought leadership webinars in Q4 of 2017 (depicted in the chart on the right side of Figure 4.) is not any more encouraging than that of survey respondents. Sixty-three percent (63%) of companies reported being in a developing state, basic (15%) or developing (48%).
Most FP&A teams are empowered to deliver strategic value across the enterprise, perception or reality? Unfortunately, based on data obtained from over 500 companies across the globe, it appears to be much more perception than reality. Data immaturity, technological immaturity, and/or analytical immaturity are inherent barriers for companies in realizing the potential that the FP&A function has to offer in empowering data-driven decision making that improves performance across the enterprise.
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