Dear FP&A Leaders: Transform your business and take planning to the next level with Extended Planning & Analysis
Extended Planning and Analysis (xP&A) or connected planning is what your top competitors are implementing in their businesses. Companies who are adopting the practice benefit from full alignment in the planning process and can pivot seamlessly in an agile manner during these turbulent times. If you aren’t thinking about xP&A now, then your competitors are always going to be one step ahead of you.
The new era of enterprise planning is here, and disruption and change has become the new norm. Organizations that survive adapt by planning and responding in a more agile, cross-functionally aligned, and precise manner. There is a business need to perform end-to-end enterprise planning with seamless data integration and a single user experience.
What is xP&A?
“xP&A is more than an attempt to ‘fix’ the planning process. It is a complete transformation of the FP&A function” (FP&A Trends, 2022). Let me sum it up in laymen’s terms – Extended Planning and Analysis is a modern approach for planning that is agile and collaborative which integrates the key planning processes (strategic planning, business planning and forecasting (FP&A), and operational planning and forecasting). This allows you as a planner to forecast in real time and take advantage of advanced capabilities such as artificial intelligence, machine learning and prescriptive analytics. Your competitors who are using the xP&A process will be the ones who are playing a key role in the organization and enabling fact-based decision-making leading to better business outcomes.
I’m ready for the move
FP&A Trends recently published a paper on the journey to xP&A and FP&A’s role in business transformation. Here are the seven steps that you need to take to get started on your xP&A process today.
- Extended Planning and Analysis Vision Document
Start off the process with a clear and defined vision for your management team. Explain what xP&A is, why it is important and lay down the benefits for your organization. As the FP&A function, you are the quarterback in this process, so you need to align with your lines of business to create a comprehensive xP&A operation.
2. Map out the planning content and process
You wouldn’t drive out on a road trip without a map, planning out your xP&A journey requires you to be thoughtful. Review the way that your organization plans and ensure that the items are necessary. Double check your resources, make sure that the plans are created with purpose and seek out automated manual processes so that you can plan more efficiently. This way you’ll create a model that will solve strategic, financial and operational problems.
3. Move to intelligent driver-based models
Take advantage of the technology available today and plan using drivers based on historical data rather than intuition. This will allow you to influence performance and enable more realistic forecasts. Now you can use the benefits of predictive and prescriptive technology to discover hidden drivers and trends.
4. Embrace Scenario planning
As you probably already know, there are endless possibilities, but we need to be prepared for the most likely situations. Let’s acknowledge this and welcome agile scenario planning so that contingency plans are ready to be put in depending on the events that arise.
5. Evaluate and implement suitable technology
Say goodbye to spreadsheets and standalone tools. Let’s embrace the top-notch technology and leave your competitors behind. Tools like SAP Analytics Cloud can help you say bye-bye to low value tasks, ramp up processes and create insightful decisions. SAP can help you make an integrated strategic, financial and operational plan that allows for extensive scenario analysis so that your organization can plan and be ready for any situation.
6. Upskill FP&A
As FP&A leaders, we need to be well versed in cross functional knowledge and our teams need to have diverse skill sets. In addition to planners, we also need architects, analysts, data scientists, storytellers and influencers to successfully implement the xP&A process.
7. Looking for opportunities to start the change
Keep your eyes peeled for quick wins.
- Automate to win by simplifying existing processes with AI
- Find bottlenecks within the planning process
- Self-service and share financial information so that users can perform their own analysis
- Run an educational program to share knowledge on new tools and their benefits
Remember moving to Extended Planning and Analysis does not happen overnight, and it is a continuous journey of improvement.
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