The FP&A Trends Webinar: The Winning Formula for FP&A Storytelling
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The FP&A Trends Webinar: The Winning Formula for FP&A Storytelling
Click here to view details and register
By Darsh Khetan, FP&A Trends Contributor
The first webinar by the FP&A Trends Group in 2023 was focused on identifying the top 7 trends shaping FP&A. The esteemed panellists led the session - Larysa Melnychuk, Diana Groschupp, Roberto Di Matteo, Abdel-Rahman Selmy and Thomas Peff.
The seven trends discussed were distributed across four functions of an organisation and were as follows.
FP&A Trends Surveys brought to light that most FP&A departments faced two issues in this regard:
Statistics from surveys over the past four years have shown that high-value activities such as insight generation and driving actions have been devoted the least amount of time consistently over the years by the FP&A teams. Furthermore, only 6% of the FP&A teams worldwide can run scenarios in real time. These two issues combinedly have been affecting the agility of the teams. That makes increased agility a target for most FP&A professionals in the industry.
Time of uncertainty is dominating currently. The environment is full of factors that require the FP&A teams to react and adapt quickly to the situations. Thus, organisations need to go beyond Financial Planning and Analysis to Extended Planning and Analysis (xP&A). This trend will help organisations become more agile, efficient, and communicative through the following:
Analytics will have to dive deeper into the drivers rather than relying on just the P&Ls and Balance sheets. These drivers can be identified using scope expansion to look beyond the current capabilities of FP&A. It will give rise to what will be called the Analytics 2.0 phase. In this phase, the key driver will be the sustainability of the business. The major challenge is that there is hardly any standardised method of measuring sustainability currently.
The upcoming technologies in Artificial Intelligence/Machine Learning will have to be used in the best ways possible to support FP&A. Technology will play a key role in Data Foundation, Decision Automation, and Decision Support. As per the responses, 48% of attendees are aware of the new technology for FP&A and implement it on occasion. 31% implement tech wherever possible. Only 5% of the respondents are happy with their current technology solutions. Interestingly, 10% of the webinar participants claimed they were not looking for the newest tech but wanted to listen to advice. The rest 6% are unfortunately unlikely to implement technological advancements in their FP&A departments.
The FP&A function will be required to collaborate with the People function in the following four areas to ensure growth:
The skills for FP&A can be broadly bucketed into the following categories:
Employees will have T-shaped profiles, where they will have expertise in one area of FP&A but will also be capable of demonstrating the other skills to some extent when needed. Those with T-Shaped skills will be the most sought in the FP&A industry in the coming times.
Having discussed the factors determining the agility of the FP&A teams in an organisation, the webinar attendees were asked to answer a polling question. For this purpose, a poll was circulated among the attendees to understand which factors were essential to advance the agility of the FP&A teams.
The poll results were as follows: most respondents (30%) believe that process transformation is crucial for FP&A agility. 23% of attendees voted that technology has the most important role, while 20% and 19% are sure that skills and leadership are the most vital factors contributing to organisational agility. Only 8% believe that dedicated resources are the #1 factor for agility.
In order to ensure sustainability, FP&A teams need to expand into and add value to the non-financial functions of the organisation as well. It will ensure greater financial transparency among the different functions of the organisation. The Environmental, Social and Governance (ESG) methodology can become one way to measure the sustainability of businesses. This will create an opportunity for Finance functions to lead the environmental reporting and initiatives.
In the picture above, we see the trends shaping FP&A today:
The webinar was insightful for FP&A professionals operating across all functions and levels, as the goal was to analyse the growth of the entire FP&A department. The session has marked the beginning of the year in a manner that will make the FP&A teams want to develop for the better.
We are grateful to Workday for sponsoring this webinar.
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