Kirjoittanut Mark Bodger, ICit Business Intelligencen johtaja
In recent years the finance transformation agenda has centred on efficiency. The focus on faster reporting, shorter planning cycles and more accurate forecasts have justified significant investment in technology, processes and data. On a daily basis we see these improvements deliver clear, measurable value for our customers.
However, something that we’re hearing more and more is that CEOs are increasingly looking to their FP&A teams for something that sits beyond budgeting and reporting. They want finance to help navigate commercial decisions. In real time, they need to test assumptions, quantify risk and provide confidence when the business is weighing competing priorities.
This viewpoint is changing the role of FP&A considerably. Forecasts will remain important but they are no longer the end point. Increasingly, they are simply the starting point for wider conversations about pricing, investment, liquidity, growth and resilience. The challenge for finance is helping leadership understand what happens when circumstances change.
Many organisations are finding that their planning processes have not evolved at the same pace. Planning models are often built around annual budgets, fixed assumptions and standard reporting outputs. They perform well when the questions are predictable. Boards, however, rarely limit themselves to predictable questions. Discussions quickly move beyond the forecast itself and into the implications of different commercial decisions, whether that involves changes in customer demand, supplier costs, financing, acquisitions or investment priorities.
When answering those questions requires analysts to rebuild spreadsheets or produce multiple versions of a model, finance inevitably becomes reactive. Valuable time is spent producing analysis rather than contributing to the decision itself.
The organisations making the greatest progress are approaching planning differently. They are investing in connected planning environments that allow assumptions to be changed quickly, scenarios to be explored confidently and the wider impact across the business to be understood while discussions are still taking place. Platforms such as Workday Adaptive Planning are enabling finance teams to spend less time maintaining models and more time interpreting what the numbers mean.
Perhaps the most significant change, however, is not technological.As businesses continue to operate in uncertain markets, the value of FP&A is becoming less about owning the forecast and more about informing the decisions that follow. The finance teams making the biggest impact combine commercial understanding with the ability to answer difficult questions quickly and credibly.
For many CEOs, that makes FP&A one of the most important strategic resources in the organisation. When leadership needs to understand the financial consequences of a decision before committing to it, there are few functions better placed to provide that perspective.
