Reasons to improve an FP&A-team:
The traditional school of thought regarding FP&A evolved around creating reports in the form of spreadsheets or static presentations, which makes it difficult to update data and implement new variables. Today, there are more efficient ways to analyse and create day-to-day reports as needed.
For example, a medical device company wishing to optimise its production would have to thoroughly read manually generated reports every month, with the old method.
With the new methods that are available to such companies, it is possible to gather information on prices, times, … of production in real-time and to make decisions accordingly on a daily basis.
This is possible thanks to an Automated Intelligence system which collects data from all departments of the company and the market, and uses this information to create automatic reports. If the company sets this up correctly, these will appear on a dashboard that decision-makers can consult (the FP&A team can also identify key factors to help C-suite leaders).
Par excellence FP&A
To make a successful transition to this system and best create as well as put into practice a par excellence FP&A system, there are three aspects to take into account.
Improve processes to drive a performance
As part of this first step, the current operating processes must be analysed to understand the key performance indicators of the company. From here on out, companies can modernise certain processes based on the findings to have an immediate beneficial effect.
Invest in technology to deliver more ground-breaking insights.
Next comes a more technological investment, but this will be useful to gather the data of the whole company in a common programme, allowing an easier and faster analysis of all the processes.
Develop talent beyond core finance capabilities.
Once the system is implemented, the FP&A team’s job is more than just creating static reports. At this point, it becomes a strategic business partner.
Here, it is important to onboard someone who can read the competitive and financial trends in a sector and who can use this research to propose measures that can help a company change course quickly and thus initiate major reforms.
Until now, most FP&A teams have been content with following a predictable, calendar-based schedule of financial planning and analysis.
This is now obsolete in the face of the constantly changing economic situation, the scale of competition and in light of current issues and problems in the market. It is therefore important to renew this system at the technological level, but also to analyse the day-to-day financial situation of the company in relation to the market.
In conclusion, focussing on the execution of operations and the development of strategy are key to improve FP&A teams.