“What is my next career move?” is a question almost everyone spends hours pondering and often worrying over. Being an FP&A professional in a finance department where many other core finance functions have been outsourced to shared service centres or third-party service providers, the options of rotations within finance are shrinking and this question of what next is becoming difficult to answer.
However, with the increasing levels of business partnering and integration, new opportunities in functions outside finance are becoming possible. Having personally witnessed some successful cross-functional movements by FP&A professionals, I am a strong believer in the capability as well as the value of such movements.
FP&A and Cross-functional Stakeholders
FP&A is one of the few functions that interacts and collaborates with cross-functional teams across the organization as a part of the regular workday. Most FP&A teams are divided into a central team and decentralized resources embedded into the various departments they support.
Central FP&A teams are involved in aggregating and analysing company-level performance and trends. They drive processes such as annual budgets, forecasts, capital planning, business mix analysis, optimization assessments, etc. which require partnering with various functions across the organization at various stages as well as senior stakeholders such as the CEO, CFO and Marketing Director.
Decentralized embedded FP&A resources work as business partners to the teams they are mapped to such as marketing, supply chain, R&D, sourcing, etc. They work closely with the respective business teams on planning, analytics and provide business decision support. For example, a Brand Financial Analyst in a Consumer Products company such as Procter & Gamble is an integral part of a Brand Marketing team. He would partner every day with the Brand Manager for building forecasts, planning marketing spends, performing analytics such as competition tracking, etc.
In many instances, FP&A professionals are charged with the responsibility of heading cross-functional projects such as cost optimization projects or development of analytical dashboards. Besides, FP&A teams regularly work with IT in automating or enhancing their analytics.
Such cross-functional nature of work helps FP&A professionals develop an understanding of the metrics, motivations, perspectives and nuances of other functions.
Shrinking Roles within Finance
Modern times have made many finance functions redundant or rendered them capable of being outsourced or automated. Functions such as accounts payable (P2P = Procure to Pay), financial accounting (R2R = Record to Report), accounts receivable (O2C = Order to Cash) have been done either automated or outsourced. With such transformations of finance departments, the retained finance professionals often find themselves in a position where there are few roles to take up within finance. One can choose to lead teams or transformations in the Shared Service Centres but often professionals working in FP&A are not too keen on such roles given the high business involvement and exposure they have in their FP&A roles.
While the times have made movements within finance seem bleak, they have also opened up new opportunities for FP&A professionals who have increasingly better business involvement and an expanded business skillset beyond traditional finance. It is not a rare sight these days to see an FP&A professional going on to assume roles outside finance such as in marketing, sales or IT with great success.
An example, I personally witnessed was a Brand Financial Analyst in a Consumer Products company who moved on to become a Brand Manager and is currently heading an entire product category. During his Brand Finance stint, this person gained a thorough understanding of Brand Marketing with its responsibilities and nuances. At one point, he knew the brand’s market shares and share of voice in media better than the Brand manager himself given the analytics he was constantly running to identify strategies for the brand to grow. This put him in an excellent position to ask for this movement and the organization was also comfortable entrusting him with it.
Another example is of a Financial analyst supporting the supply chain vertical of a major e-commerce player. Through his business partnering and analytics on transportation and warehousing cost optimization, he was able to develop a very thorough understanding of supply chain as a function. What he lacked in terms of education in supply chain management or operations, he made up for with his superior analytical and adaptive capabilities while also picking up on the functional nuances on the job.
Business Analytics: An Opportunity or Threat?
Besides the cross-functional movements into the departments one is embedded into, an interesting opportunity also exists in Business Analytics. Analytics is the buzzword of the decade and organizations across sectors and geographies are investing heavily in setting up Analytics teams.
Currently, most Analytics teams are being set up under the IT departments. FP&A professionals should, in my opinion, view this as an opportunity as well as a potential existential threat. Data analytics focuses on analysing big data and identifying trends and insights for the business. FP&A teams have been doing the same function for years, albeit with a financial focus. It is only logical that FP&A heads also head Business Analytics divisions. The main limiting factor here is the lack of IT domain knowledge on which the analytics discipline has been structured. However, the key skill remains in being able to relate the findings of an analysis of the business and making recommendations to impact more informed decision making. FP&A teams are in a much better position to handle this responsibility than IT professionals.
In conclusion, interesting career paths are emerging for FP&A professionals and will increasingly lead them out of the confines of finance. In a world where specialization is everything, core business knowledge and ability remains the most vital skill a business executive needs to possess. An FP&A professional is closely aware of business trends and insights, works with cross-functional teams to influence better decision making and is in essence an in-house consultant of sorts. Upgrading to actual business decision making roles has its challenges but is possible and becoming more commonplace.
The article was first published in Unit 4 Prevero Blog