Time for FP&A experts to steal the limelight!

Share this post:

These are challenging times for organizations jumping on the digitalization train. The amount, the variety and the complexity of data is growing at an exponential rate, and so does our knowledge and ability to gain insights from said data. However, the amount of educated employees that are well-versed in working with that data just can’t keep up. In the world of finance, this is no different. As one of the core duties of finance organizations and departments, Financial Planning and Analysis (FP&A) cannot be underestimated. However, we still see that it’s mostly the large organizations that feel the need to employ FTEs for their FP&A.

The importance of Financial Planning and Analysis specialists was one of the findings that emerged from a survey by research firm FSN, for which nearly a 1,000 finance professionals were questioned. The report even goes as far as to claim that “within the finance function, FP&A is the only discipline that can present a picture of the future toward which an organization can build its strategy.”

Niche, but essential

Despite its importance, FP&A remains a niche field, accounting for only a small percentage of senior finance professionals. The explosion of data (also non-financial) they need to assess in their work, and the ever more sophisticated techniques for modeling and analysis, do not make the job any easier. What’s more, not only the material they have to work with is changing, their roles are as well. Although ‘planning’ in FP&A implies a future-oriented approach, most experts have only had to explain why past events had occurred. Now, they’re asked for predictive rather than historical analyses. The good news is that they now have the data and the tools at their disposal to do so, which will lift their profession to an even higher, even more value-adding level.

Recognition is needed

Although the importance of FP&A specialists in this era of predictive modeling is apparent, they’re still lacking some love from the decision makers in their office. The FSN survey revealed that 44% of the heads of FP&A would like their role to be a separate one within accounting, while only 18% of other respondents shared that same idea. We believe that percentage will grow however, once executives realize the competitive edge these experts can offer when it comes to determining the strategic direction the organization is heading in.

If you want to know more about the importance of FP&A specialists for a future-proof finance practice, you can download and read Chapter 2 “CFOs and Heads of FP&A at Loggerheads” of the FSN paper here.

Want to get started with FP&A today, try IBM Planning Analytics and download your free trial. IBM Planning Analytics automates your essential planning, budgeting and forecasting processes. It provides self-service analytics for business users and flexible, multidimensional modeling for your finance team.

In our next blog, we will address the promise of cloud deployment. Stay tuned.