Writing for Payment Expert, Mark Bodger, Director at ICit Business Intelligence, outlines five key tips for FP&A (financial planning and analysis) should follow to optimise the success of your organisation.
As an FP&A professional, you know that planning, forecasting, and reporting are critical to the success of your organisation. However, these tasks can be time-consuming and complex, especially when you’re dealing with disparate data sources and, often outdated, legacy systems.
A recent survey of FP&A professionals done on behalf of ICit Business Intelligence found that 81% find themselves regularly stuck in low value, manual tasks and 75% have unnecessarily long cycles for FP&A activity.
That’s where CPM (Corporate Performance Management) tools come in. CPM tools can help you significantly streamline your financial operations, improve data accuracy, and provide actionable insights to support strategic decision-making. In this article, we’ve highlighted five top tips on how to maximise CPM tools and transform your FP&A function into a powerhouse of insight and foresight.
Tip 1: Streamline Data Integration and Management
One of the biggest challenges for FP&A professionals is managing disparate data sources and legacy systems. Our data highlighted that 71% of organisations still have disparate and disconnected legacy systems in place that prove cumbersome to maintain. This can all too often lead to errors, inconsistencies, and delays in financial reporting and analysis. CPM tools can help you streamline data integration and management by providing a single source of truth for all financial data.
This centralisation enhances data integrity and ensures consistency across all financial reports and analyses. Not only will this consistency give you the confidence to trust the data, but it will also help you improve the level of transparency that goes beyond simply being upfront with the numbers. It’s also about presenting financial information in a way that tells the real story of what’s happening and why, and its impact on your company.
Tip 2: Enhance Forecasting with Advanced Analytics Forecasting
In our FP&A survey 68% of people said their scenario planning was immature and too manual. This is where CPM tools can help you enhance forecasting with advanced analytics techniques such as predictive modelling, scenario analysis, and machine learning.
These techniques can help you identify trends, patterns, and outliers in your financial data, and provide you with more accurate and reliable forecasts. By leveraging these advanced analytics techniques, you can improve your forecasting accuracy, reduce risk, and support better decision-making.
Tip 3: Foster Collaborative Financial Planning
Although collaboration is critical to successful financial planning, it can often be difficult to achieve when you’re dealing with multiple stakeholders and disparate data sources. CPM tools can help you foster a collaborative financial planning environment by providing a centralised platform for all stakeholders to access and contribute to financial planning activities.
This platform can facilitate real-time collaboration, data sharing, and workflow management, enabling you to streamline financial planning processes and drastically improve communication across your organisation.
Tip 4: Develop Dynamic Reporting Capabilities For More Strategic Decision-Making
Reporting is often an everyday task for FP&A professionals, but it can be time-consuming and complex, not to mention that your CFO may have very specific ways in which they wish to view financial data. CPM tools can help you develop dynamic reporting capabilities by providing you with customisable dashboards and interactive reports.
These dashboards and reports can be customised to the needs of different stakeholders, ensuring that they always have access to relevant information. By leveraging these dynamic reporting capabilities, you can improve your reporting accuracy, reduce manual effort, and provide more actionable insights to support strategic decision-making.
Tip 5: Prioritise Training and User Adoption
Finally, CPM tools can be complex and require specialised skills to use effectively. That’s why it’s critical to prioritise training and user adoption when implementing this approach in your organisation. Allocate resources for comprehensive training on CPM tools to ensure that FP&A teams can leverage all features effectively, improving productivity and strategic analysis.
In addition, when looking to recruit the best talent, it’s important for you to demonstrate that the role of finance has very much evolved from purely number crunching to offering strategic insights to help your business make the right decisions.
You can also use CPM tools to actively manage skill requirements and knowledge gaps. For example: training existing teams, borrowing specialist skills within the organisation, or even recruiting new people.
So how can you promote the adoption of CPM tools to the key decision makers across the organisation?
Demonstrate their value in simplifying processes and providing actionable insights. For example, highlight success stories and quick wins in order to gain buy-in from all levels of the organisation. Moving finance teams away from an Excel-centric model into a more data-centric operation will undoubtedly improve the perception of FP&A, increase job satisfaction and reduce attrition. It will help you embed it into your FP&A team efficiently and effectively, whilst also gaining buy-in from stakeholders across the business as they start to see the value that dynamic planning can bring to their decision making.
In summary, CPM tools offer FP&A professionals unparalleled support in overcoming the challenges of planning, forecasting, and reporting.
By following these five tips, FP&A teams can not only streamline their financial operations but also contribute more strategically to their organisations’ success. Embrace the technology, harness its full potential and transform your FP&A function into a powerhouse of insight and foresight. Remember to prioritise training and user adoption to ensure successful implementation.
With the right tools and techniques, you can improve your financial planning, forecasting, and reporting, and support better decision-making across your business.
