Key Competencies of FP&A Professionals in the Era of Rapid Technology Advancements

According to PWC’s CEO Survey 2024¹, the percentage of business leaders who now believe that their business will only remain competitive for up to ten years if they do not renew their business models, has increased to 45%.

Advancements in technology continue to be a clear trend in any industry. We have seen a lot of young start-up businesses with innovative minds, lean decision processes and modern business infrastructure, which grew rapidly and dominated larger and older companies even from a different industry, causing a shift in thinking.

In this context, many global companies have embarked on a digital transformation journey to improve efficiency, and the pace of this trend has been increasing. Certain processes previously assigned to a centralised team are now being decentralised. Centralised FP&A teams and accounting departments are under pressure of downsizing due to these changes.

How will these trends affect the future of FP&A? Furthermore, what will be the key competencies that FP&A professionals will need to develop to stay relevant in the job market and contribute to the society you belong to using your talents and abilities?

What Skills Should We Develop?

Firstly, advanced analytical skills and proficiency in using new tools will remain one of the key competencies for FP&A. Automation and decentralisation are widespread trends, so recurring processes and forecasting based on historical data and patterns with parameter twists are subject to automation. In more companies, business managers have been self-serving monthly financial outcomes directly from reporting systems. They enter financial target suggestions for their responsible business entities on their own without relying on FP&A experts who previously did these jobs for them. You can add value by providing in-depth, forward-looking analysis customised to specific business needs and making relevant suggestions.

Secondly, the ability to show the bigger picture beyond the numbers and storytelling skills will make you stand out. The numbers do not convey any message or tell a story themselves. Deciphering the numbers by linking them with the reality where the internal and external factors interact with each other is an art of humanities. It has not been uncommon for me to encounter statements like ‘Our target is to increase top line by X per cent per year’ or ‘We had a Y per cent rise in return on investment, which is positive.’ without further elaboration. However, such statements gain true significance when anchored in factual evidence and contextual understanding. Customer behaviour, product performance, competitor analysis, organic growth of the market, and macroeconomic factors create a dynamic context. This context serves both for a fair assessment of such statements and for making an impactful decision.

Thirdly, be curious about changes in the business world and open to learning things beyond FP&A. An interdisciplinary approach is helpful for solving any complex issue. Accounting, quantitative analysis, and valuation techniques are important skills to master. However, developing the ability to transform numbers into a meaningful and trustworthy message and creating lasting impact demands a foundation in humanities. This includes honing critical thinking, analytical competencies, understanding fellow humans, effective writing, and the art of storytelling. Making it a habit to read classic literature, professionally written articles, visiting art exhibitions or theatres will be helpful for developing such skills. We get inspiration and creative ideas when we experience or learn new things. In this fast-changing world, continuous learning should be a life-long and joyful process.

Finally, soft skills like empathy, integrity, the ability to manage uncertainty, and the courage to amplify your voice when things go wrong will also be important. You may have experienced different business leaders interpret the same facts and story differently, make different decisions and take different actions. People have different preferences and motivations. Empathy is helpful for understanding not only an individual’s perspective but also the dynamics of group collaboration and predicting performance. At the same time, it is worth mentioning that FP&A’s role is not to make any individual leader shine at the cost of the organisation. One of the FP&A team’s distinctive mandates is to function as a check and balance function. Empathy, acting right in uncertain situations, a sense of integrity and the courage to speak out for what is right would be difficult to replace with Artificial Intelligence (AI) in a short period of time.

Conclusions and Recommendations

What can you do to make your FP&A organisation a winning team in this faster-than-ever-changing environment? Here are a few recommendations. 

Firstly, apply diversity and inclusion to day-to-day work. A homogeneous workplace is not just boring for people to work at, but also dangerous for innovation and inadequate for handling complex issues. You cannot find one person with all the competencies mentioned above. However, you can make a team with all these competencies by having people with diverse strengths and backgrounds in your team, encouraging them to share new ideas and perspectives.

Secondly, make sure the distribution of duties is clear to all, work processes are coherent, and people feel safe to reach out for help. This will secure the quality of group collaboration and strengthen the performance of your organisation.

Finally, encourage yourself and others to learn new things and hone critical/creative thinking and ability to manage uncertainty.

References:

1 - PricewaterhouseCoopers. (January 15, 2024). Thriving in an Age of Continuous Reinvention. PwC’s 27^th Annual Global CEO Survey. PWC.com. https://www.pwc.com/gx/en/issues/c-suite-insights/ceo-survey.html
Accessed February 14, 2024.
 

Disclaimer:
Any views or opinions expressed are solely those of the author and do not necessarily represent those of any companies the author has been and is working for. This article represents a high-level synthesis of cases in several companies.