At the beginning of this year, I wrote a series of posts about the next decade financial planning and analysis (FP&A). A lot of things have happened since January. With the COVID-19 crisis, the need for FP&A transformation has increased immensely but one thing is clear now – FP&A roles are becoming multidisciplinary.
FP&A is going to thrive and evolve if it continues to enhance the decision-making process in a business environment where organisations will continue to compete on analytics more fiercely and eagerly. This is why we need to see a huge shift in the FP&A skill set.
FP&A Data Scientists
The gap between financial planning and analysis (FP&A) and Data Science is closing. This is the way to bring data (both external and internal) into the decision-making process. The process has already started with more and more finance organisations getting into collaboration with data scientists.
However, FP&A’s and Data Scientists are still working in two different worlds, where there are not much of a common language and understanding of each other’s professional fields. The next decade is going to narrow this interdisciplinary gap. How? Mostly through education and “learning by doing”. We are going to see more of the “FP&A Data Scientists” in the near future. And the process has already started! Have you already noticed this trend in your organisations?
Another important multidisciplinary role on the radar is the FP&A Architect. The FP&A Architect is not just involved in building and maintaining the driver-based models, but, most importantly, in creating and maintaining the architecture of the organisational data and value flows for decision making. In other words, he/she is responsible for building the bridges between raw data, key business drivers and driver-based models that are implemented through flexible analytical solutions. This is both a very creative and analytical role that combines skills of data management, IT, modelling and advanced analytics.
During my travels with the International FP&A Board, I have observed some amazing new developments in the field of flexible analytical solutions. Unfortunately, Excel is still a very dominant “FP&A system”. The models are mostly “partially driver-based”. The quality of data is poor. The reliance on IT function continues to be high and drives a lot of inefficiencies. But the FP&A Architects already started to emerge and are very busy and in high demand. Do you see them coming? Are you one of them?
The analytical transformation process brings a lot of challenges into traditional organisations. That is why modern FP&A is all about Changing and Influencing!
Many say that some FP&A processes could be very emotional. For example, the traditional budgeting has always been about setting and negotiating the targets. The targets define the compensation. Those of you who have ever worked in the strong sales organisations know very well what I am talking about.
Unfortunately, not much has been changed over the years. Many traditional sales organisations still have a very strong “target negotiation culture”. Transforming the FP&A process in such an organisation is like “Swimming with Sharks”. Such business culture does not work well with analytics. That is why the role of the FP&A influencer is so important at the transformation time. How influential is your FP&A?
The latest changes in business environment have shown how the role of FP&A is becoming increasingly more important.
We can see a huge shift in skills requirements. Business Partnering, Storytelling and Analytics roles are still important but there is a great demand for multidisciplinary roles in FP&A such as the three roles discussed above.
Source: “Three Critical Roles for Every FP&A Team” by Mark Gandy
Modern FP&A teams should be really diversified in terms of their skills and experiences. In the “new normal” reality, FP&A is going to survive but it will be transforming towards the new roles. After all, it comes down to the importance of collaboration.