Two years since its creation, the FP&A Circle met for the 6th time in central London to hear about FP&A Change management. 50 finance practitioners from companies such as
- Johnson & Johnson
- State Street
- S&P Global Ratings
- and many others
shared their ideas and engaged in a lively discussion. The world of financial planning and analysis has observed changes of such magnitude that they cannot be described by our traditional statistical and analytical models. Change is needed, but the resistance to change is very strong.
The Meeting's Agenda
- Challenging the FP&A status quo: cultural, human and analytical changes.
- FP&A Change Management: key concepts and definitions.
- A case from the field. "Practical change management strategies for modern FP&A". Presentation by Siva Shankar, Change Management thought provoker, Interim CFO and FP&A Director.
- A case from the field. "Planning & Analysis of new products – disruptive technologies, familiar challenges." Presentation by Marco Singh, a Commercial Finance Director who has worked with global companies across the Payments, FinTech, Financial Services and Manufacturing industry, typically in high growth, innovation-led environments.
- Conclusions and Recommendations.
The Circle members shared their observations. Some of them are listed below. These observations can help to describe the extent of the Change required:
- Traditional budgeting culture is the biggest challenge: planning and forecasting processes are long (in average 5 months and more than 7 days respectively).
- Rolling forecast is implemented in around 25% of companies. Moreover, only around 5% of them claim it is value-adding.
- Excel is used for planning in 95% of the cases.
- Fully driver-based planning model observed in less than 3% of the cases.
- Integrated planning models are implemented in less than 4% of cases.
The Circle agreed that the significant change in the role of FP&A function requires big cultural shift and modern change management techniques. All these changes take time and effort but they will pay off in the end.