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Beyond the bottom-line

During a recent conversation with a CFO, they mentioned that one of their company’s greatest challenges was converting disjointed and lengthy FP&A processes into eXtended Planning and Analysis (XP&A).

The challenge of transforming functional business units into extended financial business partners, with full ownership for their financial planning and results, has become a priority for most CFOs.

There is substantial value locked in planning strategies and the insights it generates. Establishing a practical planning framework helps promote efficient operations and drives functional business managers to be more responsible by providing realistic estimations and inputs. It leads to accurate, flexible financial forecasting, interconnected strategic assumptions (KPIs) and operational budgets, ultimately improving business productivity.

However, a fragmented technology landscape with too many manual and siloed planning models, combined with the traditional business view – that planning is “finance’s problem” – makes it challenging to unlock.

The journey to XP&A starts with Teamwork.

“Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organisational objectives. It is the fuel that allows common people to attain uncommon results.”

– Andrew Carnegie

Start with the Business Process

According to a recent paper released by Harvard Business Review; there is “a persistent and troubling gap between the inherent value of the technology they develop and their ability to put it to work effectively” 1. Many organisations fail to address the underlying process inefficiencies when embarking on a transformation journey.

For extended business planning processes to succeed, the point of departure should always be assessing the process and finding ways to automate and integrate as much as possible.

Special consideration should be given to the following:

  • Remodel pure Excel based manual processes, give business process owners time to focus on value add activities.
  • Automate data integration – Bring the data to the user
  • Secure, control & govern data – One source of the truth for all
  • Always have visibility of the critical success factors, “what you measure is what you’ll achieve.”

Data Strategy in action

Data from finance, human resources, sales, and other lines of business are differently structured.

Their terminology, lineage, quality, and integrity usually differ. For example, sales may update data daily, while finance or HR update weekly, and they may all use different exchange rates when accounting for foreign sales, revenues, or salaries. It is, therefore, important that data practices are organised before the project begins. If XP&A is to succeed, organisations need to define & document their data strategy and focus on creating a “data-enabled” organisation.

Invest in a Finance Centre of Excellence (FCoE)

Finance does not become a passenger in this process, but the actual “co-pilot”. Effective finance business partnering is critical to enable business units to take accountability & responsibility for their financial planning process and outcomes. CFOs, it seems, are well aware that the shift to an insights-driven department will occur soon. Based on recent survey results from Deloitte 2, it is resoundingly clear that the finance workforce’s time allocation in the future will most likely shift toward analysis, prediction, and decision support. Through the implementation of an FCoE, finance teams will have the ability to specialise in their business acumen, data analytic skills, digital technologies/automation, and core business process skills as the enablers for future success.

 

Train train train

“For the best return on your money, pour your purse into your head.”

– Benjamin Franklin

Benjamin Franklin’s philosophy is also true for organisations. To optimise the return on investment from a transformation, organisations should foster a learning and continuous improvement culture. The biggest hindrance to successful transformation efforts is user adoption. The finance department may be accustomed to complex financial analytics and transactions that may not be the easiest to understand for the inexperienced business functional owner. As a result, sales, HR, or operations may resist accepting responsibility for financial processes and KPIs for fear of stepping too far outside their domain expertise. Training, such as Finance for Non-Financial Managers & Data Literacy, is one way to resolve teething issues when embarking on transformation projects.

 

Start your XP&A Transformation Journey with Decision Inc.

Decision Inc. is a global technology services business that enables our clients to lead the change and realise the opportunity of information in their business. We provide clients with services across the entire Information Value Chain from source and creation, to movement and transformation, enrichment, engagement, reporting and strategy.

Our key service offerings include:

  • Extended Planning & Analysis
  • Finance Business Partnering
  • Balanced Scorecard Development & Execution
  • Data Strategy Development & Consulting
  • Data Literacy Training – Cross-Functional

By delivering these service offerings via our unique “As a Service” methodology, we have changed the way clients embark and progress on their transformation journey. Our focus is on co-developing your planning process and framework, with an implementation based on short incremental phases, designed to deliver a quick return on investment and optimised value.

Get in touch if you would like to unlock the intrinsic value of extended planning and analysis.

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