Driving digital with financial planning operations

Transforming financial planning operations for value

The Chief Financial Officer’s (CFO) role is changing—and changing at high speed. With a new emphasis on digital, CFOs find their focus is expanding to include building the digital enterprise.

Keeping up with core financial activities while looking well beyond their traditional scope is challenging for a CFO, but a strong Financial Planning and Analysis function can be the game changer. A robust Financial Planning and Analysis team can lead the digital finance function, freeing the CFO to get creative, deliver insight and guide the enterprise in realizing the power of its data.

To help realize this, the Financial Planning and Analysis function should transform itself, becoming the business’s front-line partner in navigating a digital finance agenda. It’s a challenging new role for the finance function. Getting there should take time and effort.

Build an operating model

The first transformation steps involve making crucial operating model decisions—more challenging when one-size-fits-all is not an option. Each firm’s relative maturity, growth agenda, business complexity and technological capabilities can help define its unique Financial Planning and Analysis operating model.

To build a more proactive function, Financial Planning and Analysis can shift from its traditional backward-facing analysis to predictive analysis and approach that supports future business outcomes. Questions to ask include: What services, now and in the future, should this Financial Planning and Analysis function provide? What structure can effectively tap economies of scale while maintaining high service quality?

Identify a talent strategy

To back the CFO’s role as a strategic digital leader, digital talent is crucial. The Financial Planning and Analysis function needs highly skilled, knowledgeable, business-line-specific resources. By automating transactional tasks—or reallocating them to offshore or shared resources—Financial Planning and Analysis frees the team to focus on value-add analysis that can boost decision making across the function.

It won’t be enough, though, to build proficiency around today’s leading-edge activities, such as predictive analysis, scenario tracking and real-time influence on business performance. Anticipating tomorrow’s roles and skills is essential to help drive the business into the future. The time to cultivate or hire data scientists, scenario planners or Artificial Intelligence (AI) strategists is now.

• Data Scientist: Works with massive volumes of data from internal and external sources. Can combine financial, market, and operational data in a rich data set.
• Scenario Planner: Identifies likely scenarios, the triggers for each scenario and the business impact. Models outcomes using statistical analysis.
• AI/Trend Strategist: Identifies indicators of customer and competitor behavior and describes financial implications. Analyzes output to devise strategy and tactics.

Crafting an effective technology mix

Talent is essential, but—in a data-intensive function—technology is too. To deliver stronger insights and highly informed business decisions, tools and data should support real-time analytics. When choosing tools, it helps to consider the technology architecture’s full spectrum, from data management to cloud to visualization tools.

Several kinds of technology should comprise the technology ecosystem.

Becoming digital: Are you ready?

A new Financial Planning and Analysis operating model cannot be built overnight, but is worth the investment. Key considerations to keep in mind:

• This isn’t merely an operational efficiency effort. Transforming Financial Planning and Analysis is about becoming a better partner to the business.
• Empowering the new FP&A organization with skilled talent and key technology capabilities is essential.
• Sound governance that doesn’t hinder growth is important; it should aim to foster an entrepreneurial mindset among the team.
• Key performance indicators (KPIs) and service level agreements (SLAs) can keep efforts on track and help uncover issues facing the new organization model.

Ready to begin transforming your Financial Planning and Analysis function? Contact us to get started on your journey.