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Author's profile photo Colin Chu

Three Reasons you need xP&A Now

A global pandemic, rising sea levels, astronomical gas prices and a not so hot stock market. The world is rapidly changing by the second and as a business you need your planning processes to be agile so you can be on top of new market forces and ensure your business outcomes are optimized no matter what is thrown at you.

Starting an extended planning and analysis (xP&A) process is what you need to get ahead of your competition, pivot quickly and stay aligned throughout your entire business. Extended planning and analysis is a planning approach that extends past traditional FP&A and links your strategic, financial, and operational plans in real-time. This allows finance professionals to simulate live scenarios collaboratively, multi-dimensionally and at various levels of the company. Think about xP&A as a bottom-up and top-down cross-functional integration.

So why get started with Extended Planning and Analysis now? 

1. Align your teams across your lines of business 

It does not matter if you are running an S&P 500 business or a small business, you want every part of your business to be on the same page when it comes to planning. With Extended Planning and Analysis, you will have one connected plan that will reflect the impact and changes that come from any part of the business. For example, sales have been great in the past quarter and to further your growth strategy, your talent acquisition team has hired 6 new rock stars. Extended Planning and Analysis allows you to uniquely bring in real time data from your HR (Human Resource) system and tie them directly with the increased quota projections from the CRM (Customer Relationship Management) software. This allows you to harmonize your strategic, business, forecasting and operational planning initiatives whereas traditional FP&A may not give you the same visibility of impact into other functional areas. Extended planning and analysis allow you to have seamless integrations to fuel the strategic alignment that is key to your business success.

2. Risk Mitigation for unforeseen events 

What financial model accounted for a global pandemic in 2020 sales? In situations like these, it’s crucial to have access to an agile planning process. Traditional FP&A can consist of standalone tools or Frankenstein spreadsheets which are messy and take an extraordinary time to clean and process before real financial planning can be done. Sometimes, it is these delays that can cause crucial lags in decision-making which can cost your company millions in opportunity costs. For example, if you were a manufacturing company that makes Halloween costumes and you noticed that the pandemic would limit in-person gatherings, you could adjust your supply chain plans and pivot to a higher demand product such as reusable face masks. In practice, extended planning and analysis allows you to conduct on demand multiple scenario simulations. Being agile and pivoting is essential to creating a competitive advantage by mitigating your risks and turning around to benefit your business.

3. Plan with confidence on trusted data 

With the way the world is changing it is reasonable to be cautious. Extended planning analysis allows you to have one system of truth, ensuring that you have reliable data to create plans on. Not only do you get the full context of your data from the source SAP systems but SAP allows you to get value quickly with pre-built line of business content relatable to almost any industry so you can hit the ground running with the best practices.

What are you waiting for? Learn more about starting your xP&A process today with SAP.

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