Revelwood

Your SUPER-powered WP Engine Site

FP&A done right

FP&A Done Right: 3 Strategic Skills for FP&A Leaders

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, recommending strategic skills for FP&A leaders.

You stay late to meet your deadlines. You triple-check your reports to keep them error-free. You turn around one-off requests at the drop of a dime.

But you still haven’t gotten that big promotion.

That may mean there’s a disconnect between the work you’re doing and the work your boss would like you to do. Research from Robert Half Management Resources has found that finance leaders want FP&A professionals who can look beyond the bottom line to see the big picture. A study found that 86% of CFOs said strategic thinking abilities are important for accounting and finance professionals, with 30% of those reporting that these skills are now mandatory.

And this demand is only expected to increase. In one popular Workday Adaptive Planning survey, CFOs predicted that the time spent by the FP&A team on strategic tasks will double—to as much as 50%.

To show that you’re ready to take on more strategic responsibilities, start by demonstrating that you can make smart decisions. Developing these three skills will help you highlight your potential—and get picked for the next promotion.

1. Study Every Angle

Strategic thinkers plan by identifying several potential paths forward and weighing their likely outcomes against each other. And according to another survey of ours, 48% of CFOs said that, during a market contraction, finance teams provide the most strategic value by planning for multiple scenarios.

That means FP&A professionals who can identify, model and analyze how different factors could impact the company are more likely to stand out as problem solvers. The right software can help you quickly create projections based on potential risks and opportunities on the horizon—and identify actions that could help your company meet its strategic goals. This type of proactive planning can give you the ammo you need to make well-informed recommendations when it’s time for your boss to make the next big decision.

2. Create Compelling Visuals

When making a presentation to your CFO or board, don’t make your numbers do all the talking. Data is an integral part of the conversation, but it doesn’t tell the whole story. Leaders need you to explain what metrics really mean.

Data visualization can help you cut through the clutter and deliver comprehensive, easy-to-digest analysis. And this is exactly the kind of presentation executive teams crave. According to published reports, 31% of CFOs indicated that improving visualization skills would help FP&A teams represent data more effectively.

Learning how to create visuals that explain variances, period-over-period performance and sales projections will help you deliver the wow factor that will put you in the leadership pipeline.

3. Build Bridges

Sometimes, sitting down with people from other departments is all you need to gain a fresh perspective or uncover a new approach to a common problem. And this type of collaboration is what execs are looking for from their finance team.

According to an off-cited EY report, when CFOs were asked about their top goals for the finance function over the next five years, 95% listed improving business partnering with other units as either critical (58%) or a significant priority (37%)—making it by far the most popular priority.

But collaboration doesn’t have to happen around a table, looking atspreadsheets and a whiteboard. If the company’s data exists in a centralized repository, collaboration can happen virtually. Different teams can drag and drop figures into sharable reports that others can comment on in real time, making it easier to get leaders the fast feedback they need to make more informed decisions.

FP&A needs to put itself in the business leaders’ shoes. Anticipate their needs, and creatively look for ways to add value by providing insights and unique perspectives, improving the efficiency of key activities and introducing frameworks, models and structure to enable these business leaders to better plan, manage and run their operational areas.

Grow next-gen FP&A skills

Modern finance teams are more than number crunchers; they’re key partners in support of a company’s strategic vision. But not every new hire (or, frankly, finance team member) is going to have strong strategic acumen from the start. That’s OK, as long as CFOs and finance leaders are willing to nurture those skills with hands-on coaching.

It’s one thing to hire someone and then give them a list of functions they’re responsible for. It’s another to really check in on them, give them guidance, help them avoid certain potholes, and really help them bridge any gaps. Starting early with leadership training, having team members give presentations to strengthen their communication skills, and emphasizing one-on-one coaching sessions over classroom trainings can all be effective ways to build up skills that stretch beyond classic FP&A duties.

Above we presented the top 3 skills that will help you highlight your potential. In closing, we present the top 8 skills needed in FP&A teams, according to a leading publication for finance professionals:

1. Strategic and critical thinking

Automation technology frees you from the manual work and allows you to have more time to think about data critically and strategically.

2. Communication

To be successful, an FP&A professional needs to ask questions, listen objectively to various viewpoints, consider the information at their disposal, and respond appropriately to various stakeholders across multiple communication channels.

3. Tech Savvy Data analytics

New technologies can benefit your organization in various ways. To recognize them, you need to develop an enthusiasm for new technological advances and intellectual curiosity about what’s coming next. Being a tech savvy finance professional gives you a competitive advantage.

4. Technical accounting and finance skills

Undoubtedly, FP&A professionals must be skilled in their areas of expertise. You need to continue working on your education by learning new aspects of the professional.

5. Innovation

Automation will require finance professionals to be innovative and creative when it comes to solving business problems. This is one of the ways to contribute value to your organization.

6. Anticipating and serving evolving needs

Modern FP&A is not only about mastering skills in data analysis. You will need to recognize emerging requirements around you.

7. Leadership

Finance does not work exclusively with numbers. If you have emotional and cross-cultural intelligence and empathy, it will be easier for you to understand the needs of those around you. There comes a time when finance must be the reassuring voice and visionary.

8. Collaboration

Cross-functional collaboration is playing a major part in the overall success of your organization. FP&A professionals need to learn how to work with colleagues who have other skills. Their expertise and specialties can help finance develop the big-picture ideas. It is also important to keep working on your virtual collaboration and management skills.

This blog post was originally published on the Workday Adaptive Planning blog.

Home » FP&A done right » Page 3

FP&A Done Right: Is Your Planning Process Hindering Decision Making?

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, explaining how and why you should foster a culture of planning.

Long planning cycles. Short-lived plans. Siloed efforts. Hard-to-find errors. And never enough time for strategic analyses.

Do these FP&A issues ring a bell?

They should, if your planning processes are largely manual and mostly spreadsheet based, and don’t lend themselves to collaboration or version control.

An over-reliance on spreadsheets and legacy on-premises applications constrains the organization with rigid, siloed planning. These legacy planning environments are inflexible and brittle, prevent collaboration, and fail to deliver insights that drive decision-making.

Often, finance leaders are not even aware of how manual processes such as the gathering and consolidating of data, cumbersome email-based communication, and complex report creation put a strain on finance resources—a strain that keeps the finance team locked in low-value tasks. And while markets, revenue targets, and costs constantly move, old-world planning processes hinder related planning and reporting and slows decision-making to a crawl. Leaders either don’t have numbers they trust or don’t have the insights needed for agile decision-making.

Create value in all corners of the organization

Opportunities to grow are exceedingly challenging in a highly competitive and increasingly global environment. CFO research surveys typically characterize their corporate innovation efforts as highly successful. The success rate is low because getting the people, processes, and data all moving in the same direction can be difficult. To create value in all corners of the organization—sales, marketing, operations, and HR—everyone needs to fully engage with the planning process.

A siloed, spreadsheet-based approach leaves operational leaders in the dark and keeps business planning out of sight. Stakeholders don’t know where they are falling short; they can’t manage what they can’t see. While traditional planning functions on a rigid schedule (e.g., monthly), business operations are incredibly fluid. No business leader should be forced to wait until the month-end report is generated to make a decision. A finance team’s inability to provide insights in a timely manner hampers decision-making across the organization.

It’s no wonder that forward-thinking organizations are opening their eyes to a more effective and efficient way to plan—modern planning. Companies that adopt a modern planning process are better prepared to identify and take advantage of growth opportunities and operate more efficiently. Modern planning is collaborative, so you can plan as a team, and it’s continuous, so you can rapidly adapt to change.

Fostering a culture of planning

Instead of complex legacy applications and hordes of spreadsheets strewn across the organization, competitive organizations leverage cloud-based planning solutions to respond proactively to an ever-changing marketplace. Enterprise performance management solutions that integrate planning with source ERP, CRM, HR, and payroll systems offer a single version of the truth that fosters a culture of planning built on trust and real-time data.

Forward-thinking finance organizations recognize that planning will no longer suffice in a real-time, data-centric environment. The days of building elaborate spreadsheets to forecast the business trajectory—only to put them away until the next planning cycle—are fading quickly, at least at companies that want to remain competitive. A new modern planning model is emerging, centered around cloud-based tools to build accurate planning models faster, reduce errors, foster collaboration, and drive better decision-making. As stakeholders are more involved in the planning process, they’re gaining greater trust in the data. Leading finance organizations are using modern planning to:

  • Free up finance time and capacity
  • Improve the accuracy and integrity of finance and accounting data, plans, and reports
  • Accelerate cycle times for critical finance processes like month-end close, operational reporting, planning, and what-if analysis
  • Enhance collaboration with business stakeholders

In short, these finance organizations are leading with insights to drive business decisions and, in the process, elevating the role of finance to be more strategic.

Change starts at the top

Modern planning requires a cultural shift, but the rewards make it worth the effort. It can be difficult to get people to move from the comfort of their familiar spreadsheets to cloud-based collaborative planning tools, and the change has to start at the top.

The key to successfully transitioning to a modern planning model is thoughtful change management, wherein all parties understand the value of centralized planning tools and how they can contribute. When everyone takes ownership and knows how they are expected to add value, innovative planning, analytics, and performance measurement engage more people—including sales, marketing, operations, and HR—in the process of planning, moving away from the old, static models of the past.

The true payoff of modern planning is realized when everyone is working together on a continuously updated plan that incorporates fresh, valuable, and trusted data.

Tomorrow’s winners will be the most agile

In summary, modern planning means business agility. And business agility means organizations like yours can think fast, move first, and change rapidly, while maintaining control and stability. It means you can understand not only what’s going on but also how you could respond and what effect your actions would have.

It enables you to meaningfully digest the new volume, variety, and velocity of data by capturing it all in a single, intuitive, integrated environment, and surfacing the critical information you need to make decisions.

It brings your whole business together by broadening participation in planning and strategy to improve both day-to-day operations and your understanding of the overall dynamics of your business.

It’s continuous and company-wide, supported by a platform that’s easy-to-use, fast, and powerful. That makes it easier to model complex scenarios, link together operational and financial plans, monitor executional results, analyze past and current performance, and drill down into (or roll-up) fine-grain reporting from any area of the business.

The world isn’t going to slow down, and markets aren’t going to get less competitive. In the long-term (and probably before then) business agility isn’t going to be just a nice-to- have, or even a significant differentiator.

It’s going to be the deciding factor between the businesses that survive, and the businesses that wish they had.

This blog post was originally published on the Workday Adaptive Planning blog.

Home » FP&A done right » Page 3

FP&A Done Right: Volatile Business Conditions Require Agile Planning

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, explaining how to lay the groundwork for business agility.

Manual, spreadsheet-based planning may have worked well enough in a more predictable age. But today? Not so much. Volatile conditions demand a smarter approach to financial planning and analysis (FP&A), and more and more finance professionals are discovering that legacy planning processes don’t let you go there.

It’s not that spreadsheets aren’t great—we love them. But, let’s face it, spreadsheets break down if you’re trying to rely on them systematically to gather data from across the organization, roll up departmental plans, or do complex, collaborative planning.

Even traditional market forces have proven challenging to companies relying on old-world technologies and approaches. Technological advances, ever-increasing customer expectations, and smarter, data-driven decision-making put pressure on finance teams to find new ways to operate with agility.

But how do you plan in a way that allows you to respond to such events, from the predictable to the unlikely?

The answer begins—and ends—with a modern approach to planning.

Why old-world planning is a disadvantage

The traditional planning models finance teams relied on for decades aren’t just a questionable choice in times of disruption—they can leave your business at a grave disadvantage. Businesses hampered by outdated planning processes are often left scrambling to react to changes while more agile competitors outpace, outperform, and outmaneuver them. Look around you: The companies that are performing well at this minute have pivoted—sometimes substantially—in a matter of weeks, sometimes days. Their business agility has become their defining attribute for success.

It’s safe to conclude that many of these agile businesses aren’t weighed down by manual, episodic, and siloed planning. Rather, they’ve likely embraced a more modern approach to planning—planning that’s collaborative, comprehensive, and continuous. These businesses consistently minimize risk, maximize performance, and create competitive advantages because their planning empowers greater business agility.

The difference between static and modern planning can be stark. Legacy planning tools are typically bogged down by versioning headaches and siloed, instantly perishable data. In contrast, modern, strategic planning models allow teams to broaden planning data beyond finance, pulling in real-time operational and transactional data fromERP,HCM, and other slices of the enterprise stack—all to make better, data-driven decisions quickly.

Laying the groundwork for business agility

As many companies recognized even before the current crisis, agility is a business imperative—and this more modern approach to planning is the key to achieving it. These three milestones will get you started on your journey to achieving a new way to plan.

1. Assess the status quo

Before you map out where you’re going, you need to understand where you are. Take inventory of the current state of your company, more specifically the business planning obstacles keeping you from implementing a more modern and streamlined planning environment. More than likely, these obstacles will pertain to people, processes, or technology, or some combination thereof.

Assessing where you are means getting granular.

  • What do your current business planning processes look like?
  • How long does it take you to create a budget? A forecast? An annual plan?
  • Where are opportunities for improvement?
  • Who are your planning stakeholders?
  • What technology do you have in place, and how well is it serving you?
  • What data challenges need attention?
  • What are the bottlenecks?
  • What could be automated that isn’t?
  • Are there any opportunities for automated data integration?
  • What are you lacking in workforce planning?

Answering questions like these will help you get a clear sense of what you’re working with and where you can improve.

2. Get organizational alignment

Being a change agent is no easy task. That’s why you’ll need to recruit a savvy senior-level advocate to help champion planning as a worthy and necessary cause. Along with your senior advisor, you’ll need a task force representative of other departments outside of finance, including operations, sales, and HR. Don’t forget to include IT to help you navigate technology needs and coordinate various data sources.

The next move is to align these key people with the business agility cause you’re championing.

How? Build a business case.

You can do this by quantifying the impact that the organization’s current status quo has on the company. What are manual processes and bottlenecks costing your business in time and money? What opportunities are passing you by? Conversely, what would those measurement strategies and KPI models look like if you implemented a modern, or active planning model? Try to unearth more nuanced ROI measures—for instance, how cutting budget time in half could give your people more time to run critical what-if scenarios—to really drive home the meaningful change that a modern agility planning model would bring.

Once your team is in place and your pain points recognized and quantified, you can map out a plan for your initial project. Consider focusing your initial effort on a function within finance so you’ll have control over the rollout. Develop a multi-phased plan that clearly communicates goals, a concise and actionable plan, and the key metrics for your KPI model. The ability to effectively communicate the why behind this initiative will help secure any executive buy-in you need for the how. A comprehensive and well-thought-out plan will go a long way toward achieving that.

3. Expand across the business

As noted above, there’s a strong case for beginning the rollout of your new planning model in finance and focusing on low-hanging fruit to bring early and easy wins. You’re motoring along, mapping projects, tracking and communicating progress, analyzing KPI reports, and making necessary tweaks. Once a rhythm and familiarity are in place, broaden your scope beyond finance. Initiate planning projects that engage HR, sales, or marketing. This is where you begin to extend the use and impact of modern, company-wide planning.

The key in this phase is to strengthen cross-departmental communication and collaboration. Don’t fall into the trap of relying on your technology or tools to do the heavy lifting. It will be easier to realize and maintain success with regular stakeholder one-on-ones, identifying lessons learned along the way, uncovering opportunities for more ingenuity and improvement, and communicating success and congratulations when they’re warranted.

Doing this will help elevate the role of finance to a strategic force within your organization by orchestrating planning throughout the business. Finance will no longer be known primarily for gathering budget numbers and issuing reports. Instead, your business will look to finance to drive the change and innovation needed to not only weather times of uncertainty, but to thrive in them.

These three pillars lay the groundwork for creating a more agile planning environment—one that will help you plan for what’s coming, whatever that may be. With this foundation and the insights we’ll share in subsequent blogs, you’ll be much better equipped to map your way forward into that tomorrow.

The bottom line

It’s never been easier to define the main driver of business success. It comes down to how fast your business can identify and proactively respond to change. But if your business is mired in static planning —characterized by long planning cycles, immediately obsolete plans, siloed efforts, and hard-to-find errors—it won’t be operating with maximum speed or agility.

This is doubly true in today’s fast-paced, data-driven world. Businesses hampered by outdated planning processes are often left scrambling to react to changes while more agile competitors outpace, outperform, and outmaneuver them.

Wherever you are on your planning maturity journey, the tasks here will help you expand and accelerate business agility by:

  • Creating a new kind of planning mechanism that’s distributed, inclusive, and optimized for your strategic objectives.
  • Empowering finance to continuously deliver insights that help the business course-correct. To power better, faster decision-making in ever-shorter cycles based on rolling forecasts and real-time (and eventually, predictive) data.

The truth is, building a continuous one-to-one alignment between your strategic vision and your operational reality isn’t easy. It’s something very few businesses can claim. You won’t get there overnight and you will face hurdles.

But it only takes a few small steps in the right direction before momentum starts to build. Before long, those steps will amount to a giant leap forward and significant competitive advantage as business agility accelerates exponentially.

This blog post was originally published on the Workday Adaptive Planning blog.

Home » FP&A done right » Page 3

FP&A Done Right: 3 Steps for Selecting your KPIs

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, explaining how to identify the most appropriate KPIs for your organization.

Now more than ever, companies that are unable to adapt or pivot easily to adjust to changing market conditions don’t just risk falling behind. They risk their very future.

But business agility isn’t something you can implement overnight. It takes a modern, multifaceted planning environment—one that isn’t weighed down by static, legacy planning processes characterized by spreadsheets, siloed data, outdated annual plans, and stale historical snapshots.

Today, forward-thinking CFOs and their FP&A teams understand the need for nimble, data-driven financial modeling powered by cross-departmental collaboration and encompassing a panoramic view of the business—one where planning happened not just within finance but throughout the enterprise. This is the definition of modern approach to planning.

And it’s exactly what businesses need right now.

In a recent blog, we outlined the three key steps that help you lay the groundwork for a modern planning model within your own organization. To realize the full potential of that groundwork, you’ll also want to engage a series of key initiatives that will amplify your ROI and increase the velocity of business transformation. Here we look at the first of these: identifying your critical KPIs.

When everything is important, nothing is important

When everything is deemed critical, how can you be expected to prioritize? It’s impossible to effectively plan or make decisions quickly when it’s unclear what is truly driving business success. Bring those mission-critical KPIs to light, however, and you can quickly get everyone aligned around them.

But before homing in on these metrics, it’s imperative to step back, take a look at the entire organization, and recognize that performance is tracked differently in each department and team. Your core KPI model should take into account different flavors of measurement strategy across departments, recognizing the metrics that weave through multiple departments. This will help ensure that planning is collaborative and comprehensive, and that tracking progress and reporting means the same thing to all the players involved. The biggest plus in all of this? This shared measurement strategy establishes company-wide ownership and direction.

To help you isolate your organization’s KPIs (and ultimately to plan better), consider these three steps.

1. Partner with operational leaders to uncover their mission-critical KPIs.

Rather than try to guess what functional leaders care about, take the time to sit down with those key stakeholders and walk through how they define success. What does their measurement strategy look like? How do they currently track and manage their own progress? What are their data sources? Whom are their reports important to? Do they use specific language or terminology that might mean different things to people in other departments? Be as thorough as possible in fleshing out their measurement strategy and any processes they have in place to support it.

2. Keep it simple.

People can get caught up in attempting to adhere to KPIs that aren’t easily tracked or aren’t even truly indicative of performance. Avoid establishing complicated processes or adding new, hyper-focused metrics to the mix. Yes, your goal is to maintain accuracy, but you need to balance it with minimum resistance. The last thing you want is to get lost in data and complicated algorithms, forcing you in the end to have to manually follow up with gatekeepers when the time comes to pull a report.

3. Establish a reporting system.

After isolating the necessary KPIs, you’ll need to set up some workflows around reporting. What are the tools you need to access and generate a KPI report? Are these tools accessible and easy to use for all stakeholders? What are the bottlenecks, and who are the gatekeepers holding back the flow of KPI reports? Ensure your reporting operations are accessible, easy to use, and accurate enough to give you a true snapshot of your organization’s progress—without data overload.

This blog post was originally published on the Workday Adaptive Planning blog.

Home » FP&A done right » Page 3

FP&A Done Right: 5 Ways Dashboards Empower The Office of Finance

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, exploring how to unlock hidden opportunities with dashboards & analytics.

Visualizing data is often the fastest way to identify trends and patterns that lead to insights and better decision making. That’s because the simple clarity of visualizing data via interactive dashboards can reveal hidden opportunities that likely would have been missed in more traditional analysis and sharing of data.

Here are five ways dashboards can help identify valuable insights that may have been overlooked in the past.

1. Dashboards encourage company-wide planning (or xP&A)

Simply making dashboards accessible to stakeholders throughout the organization represents a huge win in itself—and a significant step toward breaking down silos. Yet beyond that, increasing the number of people who have access to data presented in digestible formats exponentially increases the chances of those aha moments occurring. The production floor manager will surely have a different perspective than the CFO. When that perspective is informed with accessible data delivered via a dashboard, the stage is set for new efficiencies and improved productivity.

2. Dashboards show instead of tell

There’s a reason the phrases “go through the numbers” and “eyes glaze over” are often uttered in the same sentence. Traditionally, delivering financial information has largely been a one-way conversation with the finance team presenting mundane reports and data downloads. With the exception of the number crunchers in finance and accounting, many business partners get lost or disinterested when presented with a number or data overload. Dashboards avoid this challenge by elevating the data to the next level and using graphics and visualizations to clearly show data in formats that provide key context and clarity. When data gets presented in highly visual and familiar formats, business users can often quickly see challenges and opportunities that otherwise might have been missed.

3. Dashboards offer customized views for different thinkers

Different people consume information in a wide range of ways. Some may be more comfortable viewing data presented in standard bar, column, gauge, area, and doughnut charts. Yet others benefit from data presented in more engaging or interactive formats. Workday Adaptive Planning dashboards feature data visualization that includes funnels, dials, waterfalls, bubbles, histograms, radars, and Pareto charts. Users across locations and on any device can view data in the formats that connect with their unique way of learning and thinking.

4. Dashboards are ever-present

Even finance pros and business leaders who are adept at extracting insights from traditional reporting face the challenge of locating reports once they are filed away. And once people find the report, they have the time-consuming process of checking if the data is still accurate. Conversely, dashboards are continuously available via a wide range of devices with data updated in real time, assuring users that they are working with the latest available information. So if conditions change or a new opportunity arises, easy-to-access data visualization is there to support decision-making and reveal how an opportunity may be quickly leveraged.

5. Dashboards are inviting and simple to use

The simple power of dashboards is that they are easy to use and invite users to experiment, explore, and discover. By eliminating the complexity barrier, the odds of uncovering hidden opportunities expand dramatically. Ultimately, dashboards create the opportunity for self-service analysis for everyone. That allows any user to perform drilldown analytics, create period-to-period comparisons, and explore iterative what-if analyses that can effectively identify issues that need immediate attention while also identifying trends that could be leveraged through sales and targeted marketing efforts.

This blog post was originally published on the Workday Adaptive Planning blog.

Home » FP&A done right » Page 3

FP&A Done Right: What Type of CFO Are You?

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning. It is part 1 in a two-part series on the changing role of the CFO.

Finance has gained new perspectives from the impact of COVID-19, which has created the imperative for every business to move forward as a more agile and digitally enabled function.

But it can be tough for finance leaders to rise above day-to-day responsibilities to fill the big-picture role their companies need. Many formerly tactical CFOs have become strategic CFOs by taking one step at a time.

Here are three common hurdles on a CFO’s path to becoming more strategic and transformational—and how to move beyond them.

Hurdle #1: Cumbersome Planning Process

If the budget planning process is an onerous, time-intensive endeavor, it will remain stuck as an annual activity. That means financial insights are relatively static, reactive, and error-prone. To be strategic, CFOs are moving toward more frequent forecasting that needs a streamlined process.

Continuous planning requires financial teams to move beyond mere risk mitigation and financial metrics and to consider operational metrics and opportunity identification. This requires shifting your starting point. Rather than beginning in the past, with last year’s performance, you have to start in the future. Define and establish where you’re headed and the financial resources needed to get there.

Once you have these goals, the next step is to define a schedule for your company to reach those goals. When will strategic reviews take place? How do they translate into operational plans, and how do those plans mesh with your monthly, quarterly, or annual forecasts?

Hurdle #2: Time-intensive Data Management

Creating a streamlined process requires strong financial leadership. CFOs have to not only measure and report on financial and operational metrics, but also effectively communicate to the entire company its progress on financial and strategic goals. This takes time and sustained effort—which means you can’t bury your head in the numbers all day.

This is where leveraging technology comes in. At some organizations, finance departments spend up to two-thirds of their time gathering and managing financial data and ensuring its accuracy. That means there’s little time left for analysis, and the CFO isn’t able to rely on that deeper thinking when the CEO comes seeking advice.

In order to rise above this scenario, you have to make sure your team is using self-service, especially in reporting and analytics, and automation. A simple, powerful self-service platform provides real-time data, which frees up team members to do the deeper work of investigating that data without continually having to request more information.

Hurdle #3: Department Silos

When the finance team is viewed as a separate department on its own little island, everyone loses. Isolation makes it harder to gather accurate, real-time data. That makes budget managers less invested in the budget-planning process, which in turn makes it less likely that departments are held accountable for hitting their budgets and benchmarks. And it happens a lot: Nearly half of respondents in a Workday Adaptive Planning survey of CFOs said their teams could stand to collaborate better.

To avoid this downward spiral, high-performing companies increasingly train their finance teams to be well-rounded leaders from the get-go. By emphasizing general leadership and management skills in addition to quantitative mastery, CFOs ensure their departments are fully invested in the budget process. Put another way: In a world where the future is harder and harder to predict, the best plans must involve everyone in the business. That’s the value of company-wide planning, or extended planning and analysis (xP&A).

For FP&A practitioners, that means working with your team to ensure everyone is communicating clearly and consistently with the rest of the company. And “communicating” doesn’t mean throwing a ton of data at busy colleagues. The information you share has to be relevant and customized to different business units so each team can easily consume it.

This blog post was originally published on the Workday Adaptive Planning blog.

Read more FP&A Done Right posts here:

FP&A Done Right: Predictions of “Extraordinary” Growth This Year

FP&A Done Right: Collaborate More When Planning

FP&A Done Right: Achieve More Reliable Financial Forecasting

Home » FP&A done right » Page 3

FP&A Done Right: Predictions of “Extraordinary” Growth This Year

by Leave a Comment

2020 disrupted nearly every industry – some in good ways, some in bad ways. With the pandemic still impacting our daily lives, we might expect this year to be uncertain too. But perhaps not!

The 2021 BDO Middle Market CFO Outlook Survey found some positive and encouraging results, including:

  • 60% of respondents are forecasting economic recovery
  • 56% expect revenue increases
  • The pandemic accelerated digital transformation at 39% of companies
  • 36% of companies found expansion opportunities for products or services
  • 29% plan to seek private equity investment
  • 24% expect to undergo a merger or acquisition
  • 20% plan to pursue an IPO

As CFO Dive reported, “It’s clear the pandemic forced businesses to reflect, and as a result, middle market leaders took action,” Matt Becker, national managing partner of tax at BDO, said. “They refreshed strategy, they prioritized what mattered most, and now they’re aiming to emerge as more resilient and agile companies.”

The report also included findings about the impact of the pandemic. For example,

  • 43% plan to increase or establish permanent remote work options
  • 28% will eliminate or consolidate their real estate holdings and office footprint
  • They also report working towards a “more nimble workforce,” with 38% leveraging automation and 32% using outsourcing

Take a look at the report. What are you predicting for the coming months?

Check out more FP&A Done Right posts here:

FP&A Done Right: The Role of KPIs in Driver-Based Budgets

FP&A Done Right: xP&A and Modern Finance Planning

FP&A Done Right: Rolling Forecasts for More Strategic FP&A

Home » FP&A done right » Page 3

FP&A Done Right: Collaborate More When Planning

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, recommending how to get other departments to collaborate with the Office of Finance.  

When it comes to business, collaboration is vital. After all, no single department can do its job for long without the other departments pulling their own weight. Sales is no good if shipping can’t deliver; marketing falls flat if customer service keeps alienating users; everything grinds to a halt if human resources doesn’t provide the appropriate staffing.

But for some reason, when it comes to the numbers, it can feel like every department is on its own. Data is often stuck in silos, making it difficult or even impossible for other departments to get the information they need to do their jobs well.

Nowhere is this more evident than in the department that makes numbers its business: finance.

But achieving a collaborative finance function can be difficult. That’s because FP&A often lacks the necessary time, direction, or clarity around KPIs to build the cross-functional relationships required to improve forecasting and reporting. So what should be a team effort becomes a finance exercise, and when numbers change, it becomes finance’s fault. In the end, we lose credibility as a business partner.

Make Your Data Everyone’s Data

So how do you get other departments to collaborate with finance? Start by empowering your business partners with more ownership and accountability in the data and your process. For example, many businesses still do most of their forecasting and planning with spreadsheets. Not only is this wildly inefficient (not to mention more likely to include errors), but it keeps all the information bottled up on one person’s screen until they’re ready to share.

We all have seen an Excel spreadsheet named finalV2 or Final V3, only to find out our business partners are using FinalV6. This is a leading cause of number mismatch. Using modern finance tools, a finance team can collect and report on the numbers without needing to send and receive Excel spreadsheets. Everyone is on the same version and making the changes together. This just makes the business partners a part of the overall process, not part of the problem.

The more you can modernize your process and increase visibility into KPIs across the company, the more others will think of “our numbers” instead of “finance’s numbers.” When you create a single source of truth and share it, collaborators will be able to move past arguing about the numbers and start working together to decide on next steps.

A Strategic Bonus to Collaborative Finance

As a bonus, automation and dashboards for self-service collaborative reporting can vastly reduce the amount of transactional work the finance team has to accomplish each day. This frees up our time for both increased collaboration and providing the strategic, high-level analysis that helps move the company forward.

The bottom line: Financial collaboration becomes easier when you stop relying on static spreadsheets. It starts with getting the entire team working with one, trusted set of numbers, and building on a foundation of accurate, up to date data.

This blog post was originally published on the Workday Adaptive Planning blog and appeared here.

Check out more FP&A Done Right posts here:

FP&A Done Right: Five Tips for Budgeting in the Age of COVID

FP&A Done Right: To Recover from Economic Shock, Are CFOs Envisioning Enough Scenarios?

FP&A Done Right: Three Driver-based Budgeting Tips for CFOs when Change is Imminent

Home » FP&A done right » Page 3

FP&A Done Right: Achieve More Reliable Financial Forecasting

by Leave a Comment

This is a guest blog post from our partner Workday Adaptive Planning, written by Gary Cokins. Cokins is an internationally recognized expert, speaker and author in enterprise and corporate performance management systems. In this piece Cokins outlines three steps for more reliable forecasting.  

When a company fails to meet its financial targets, business leaders want to know why. Was it the pandemic? Did sales underperform? Did operations overspend? Were their purchases more expensive than expected? Was productivity below established standards? Did finance develop a forecast that was wrong from the start?

Determining the causes of budget variances is an effective way to avoid similar missteps in the future, as well as during times of disruption. But many businesses struggle to understand the causes of variances and to define a process that will turn out accurate forecasts every quarter.

Finance and business teams must work together to identify the activities or data gaps that led to a missed forecast projection and caused price, cost, and efficiency variances. Whether poor decisions were made, the business landscape changed, or customer needs evolved, digging into the root cause starts with building relationships based on trust and transparency.

Companies need to continuously answer these three questions: What? So what? and Then what? Answering the first question—What happened?—requires good reporting with visibility. Answering the second question—So what?—involves separating the signal from the noise and determining what is relevant from the reporting. Arguably, answering the third question—Then what?—is the most important and critical part, because only these decisions impact the future.

Here are three tips that will help your finance team set performance targets and standards that company leaders can be confident in.

Step #1: Bring everyone to the table

Hitting a financial forecast isn’t just about meeting sales goals. Employee turnover, travel expenses, marketing costs, and other operational expenditures must be accurately projected to create a viable financial forecast.

But finance teams can’t analyze all these variables on their own. They need to work closely with sales, HR, marketing, operations, and executive teams to get a clear view of past performance, changes on the horizon, and potential risks and opportunities.

Centralizing financial information in a single shared database reduces the time it takes for finance teams to gather this information, giving them more time to focus on analyzing causes of variances and speculating on potential outcomes. Collaborative financial planning software also helps keep information up-to-date by making reporting easier for other departments.

It may take time to get the whole company on board with a new data collection, integration, and delivery process, but the payoff that comes with more reliable reporting is worth the effort.

Step #2: Plan for multiple outcomes

It’s impossible to know for certain what the future might hold. No one has a crystal ball for this. But there are ways to view the planning horizon. One way is to create multiple projections that account for different scenarios. This can include sensitivity analysis by changing some of the variables, such as the forecast sales volume and mix, to calculate projected profits. This can keep your company running on all cylinders—regardless of what comes its way.

Project for at least two possible outcomes—one optimistic and another cautious—so you can create proactive response plans. Look closely at the assumed factors and variables that are most likely to impact your projections. For instance, a change in the price of raw materials, in labor rates, or the emergence of a new competitor could create pricing pressure, which might lead to a decline in revenues.

Scenario planning can also help companies navigate regulatory changes that come with political transition or turmoil. According to a survey by KPMG, 77% of U.S. CEOs say they are focusing more on scenario planning to manage change in the current political environment.

However, with the increasing responsibilities falling on FP&A teams, many feel they don’t have enough time for this type of proactive planning. Sixty percent of CFOs estimate that ad hoc analysis, such as running a new scenario for the forecast, takes up to five days, according to a survey we published a few years back.

Planning and budgeting software can help FP&A teams speed up the time it takes to outline the financial implications of different scenarios and outcomes. The right tool lets teams run reports with the click of a few buttons, giving them more time to consider the risks, opportunities, and assumptions to create comprehensive response plans.

Step #3: Collect customer data

Understanding changing customer preferences, needs, and demands can also help improve the accuracy of financial projections—and boost a company’s overall financial health. However, a third of U.S. CEOs say the depth of their customer insights is limited by a lack of quality customer data, according to KPMG. So it’s no surprise that nearly two-thirds expect to invest in data analytics technology in the next three years.

“The whole idea of knowing what the customer wants before they want it is sort of the brass ring,” Tom Hayes, president and CEO of Tyson Foods, told KPMG. “We have real-time data from the shelf back to our supply chain. It takes out a lot of waste and helps us to more accurately forecast—a great benefit for products with a short shelf life.”

Taking the right steps to figure out where a missed forecast and associated assumptions went wrong will help keep business performance on target year after year.

This blog post was originally published on the Workday Adaptive Planning blog.

Read more FP&A Done Right posts:

FP&A Done Right: There is Life After December – The Fixed Forecast Dilemma

FP&A Done Right: Rolling Forecasts for More Strategic FP&A

FP&A Done Right: The Role of KPIs in Driver-Based Budgets

Home » FP&A done right » Page 3