8February 2018Financial Planning and Analysis (FP&A) as a strategic partner has become a recurring theme in the corporate finance community. Most in FP&A agree that becoming more strategic is a natural evolution to add more value to the business, but it is not always clear what that means or how to achieve a more strategic approach. A good place to start is to clarify that FP&A adds value to the business by enhancing business outcomes through the production of quality data, information, and insight. From business planning to measuring actual performance, quality insights enable more informed decision making.Three Guiding PrinciplesClarifying how FP&A adds value allows organizations to design a more strategic FP&A operating model. One approach is based on three guiding principles: Improve the FP&A value proposition, evolve processes to be as value-added as the outcomes, and bring stakeholders together. Improve the FP&A Value PropositionThe first guiding principle in redesigning a more strategic FP&A capability requires an increase in the quality and volume of actionable insights. To achieve this, merge the DNA of traditional FP&A with that of enterprise analytics. In other words, redefine FP&A as Financial Planning & Analytics.Financial Planning and AnalyticsWhere the conventional definition of "Analysis" in FP&A is exclusive to financial statement and variance analysis, merging traditional FP&A with enterprise analytics enables insight-based decision making across all aspects of the business. Furthermore, a focus on simplifying the business partner experience allows analytics and insights to be much more accessible to enterprise stakeholders. An effective structure is one that allows stakeholders to focus on the business questions they need answered, with the FP&A team procuring the data, completing the analysis, and circling back with insights and recommendations. Evolve Processes to be as Value-Added as the Outcomes The second guiding principle in redesigning the FP&A operating model is to evolve FP&A-led processes in a way that stakeholders find as much value going through the process as they do with the final outcomes. To accomplish this, there are two core areas on which to focus: planning and forecasting. Financial Planning and BudgetingFor many organizations, financial planning & budgeting is an arduous process where stakeholders go through the motions. Typically, finance is dragging stakeholders through a process that they find little value in.To set a new paradigm, FP&A should develop and implement a more comprehensive and value-added business planning process where everyone is included. Begin by bringing together the executive team to align around strategic choices and goals that are supported by quality information and insight. Strategic choices should cascade into a set of enterprise priorities, which include both performance goals and priority initiatives. Finally, enterprise priorities should cascade into business unit and functional priorities. Through this process, stakeholders are able to work together and align around a focused set of strategic and operational choices, which become fully reflected in both long-term and short-term financial plans.FP&A of the Future:Emerge as a True Strategic PartnerBy Nick Fischer, SVP & CFO, BetteridgeIn My OpinionNick Fischer
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