Financial Planning 2021; Three Little Words
Much of my time, conversations and thoughts over the last few months have revolved around three little words. No, not the three little words you may immediately think of, but rather three words that will be close to the heart of many FP&A professionals right now; Agility, Responsiveness, and Resilience. These have almost become watchwords for the industry over the last nine months, as professionals have grappled with the need to provide their businesses with the information to make immediate business decisions, to plan and then re-plan, to generate forecasts and to simulate multiple potential outcomes based on rapidly changing variables time and time again. And on reflection, it’s clear to see that some have been more prepared, and able to cope with this than others.
Our survey of FP&A professionals in 2020, in collaboration with FP&A Trends, showed a clear difference in the success of FP&A practices between our entire group of respondents, and those considered to demonstrate “best practice” approaches in FP&A. Among the challenges cited by respondents, was a need for better budgeting and forecasting systems (30% of respondents saying this), but at the same time, many organizations also reporting using spreadsheets (73%) within their planning and forecasting processes. Of course, while we have all used and love spreadsheets for their abundance and availability, at the same time we need to acknowledge their limitations too; they require manual intervention, are prone to data and calculation errors, can become unwieldly and complicated and lack the flexibility and agility to support rapid recalculations and simulations. So, in a world of FP&A that now needs to be agile, responsive and resilient, then surely the writing is on the wall for old spreadsheet-based planning, budgeting and forecasting systems. In fact, perhaps it’s time for organizations to take a long hard look at the strategic importance of Financial Planning and Analysis in their businesses, reflecting on the challenges identified in 2020, to see with greater clarity the opportunities that they might identify for improvements in 2021 and beyond.
What if organizations could…
- Plan and forecast with greater ease, agility and flexibility
- Simulate multiple business scenarios in real-time in response to changing market dynamics
- Build resilience into business plans and the processes and systems underpinning FP&A
How would such capabilities help to transform your approach to FP&A?
And, knowing the present need for greater agility, responsiveness and resilience in FP&A, what’s your plan to deal with this moving forward?
Join my colleagues, Pras Chatterjee and Chris Chan on February 23rd 2021, in our FP&A show at the SAP Finance and Risk Virtual Summit. They’ll be speaking with special guests to delve into some of the issues driving change in FP&A practice, and identifying opportunities for finance professionals to transform their approach to FP&A. It’ll be a rapid-fire, feature packed 45-minutes of wall-to-wall FP&A-talk that you just won’t want to miss.
Thanks for reading, and hope to see you on the 23rd February!