Do you consider yourself an innovative FP&A leader? A recent survey, sponsored by Prophix, asked 311 FP&A leaders around the globe to share insights about their organization’s finance function. The results point to a lack of advancement in analytics and a strong desire for finance professionals to take on a more strategic role. The survey surfaced seven key insights on the evolution of FP&A:
- Companies Are Immature Relative to FP&A Analytics. Over half of companies (55%) report being in a basic or developing state of FP&A maturity. Mature FP&A organizations reach an advanced or leading state by transforming their processes through investments in people and systems.
- FP&A Teams Aspire to Be More Strategic. FP&A is transforming, moving from a back-office function to becoming a strategic advisor. Sitting in the middle of the organization, FP&A is well-positioned for bridging operational and strategic planning processes. If the business culture allows, FP&A can become an influential business partner.
- Companies Waste Time on the Wrong FP&A Activities. Companies spend too much time on data collection and validation, with 32% saying it takes longer than three months to produce a budget. Inefficient budgeting and forecasting processes slow down the potential for finance to focus on activities that drive strategic objectives.
- Companies Face a Shortage of the Right Data. One of the challenges of 21st-century FP&A is identifying key business drivers in a growing sea of data because companies face a shortage of the right data even at the basic level. Eighty-eight (88%) of companies struggle with data quality. Only twelve percent (12%) of respondents have timely access to the right data. This is a very serious barrier to realizing the power of modern FP&A.
- FP&A Success Hinges on Technology. Unlocking the true value of FP&A means having the ability to drive a quick and flexible decision-making process. Surprisingly, forty-percent (40%) of companies reported having only basic or very basic reporting and analytical tools. The solution is to adopt a flexible planning tool that supports collaboration and advanced analytics.
- Executive Perceptions Are Inhibiting Investments in FP&A. Effective and efficient FP&A requires the right business culture. It all starts with executive support. This requires a willingness by executives to invest in the right people, processes, and technology to inspire a mindset of continuous improvement relative to FP&A. The perception that FP&A does not have, or cannot have, a meaningful strategic impact can limit the value offered by the function.
- FP&A Leaders Want Better Data, Better Technology, and More Accountability. FP&A leaders realize that they need to work to deliver FP&A excellence at their companies. Seventy-nine percent (79%) of companies report that an upgrade in FP&A technology would empower them to deliver better results. Improving data quality, upgrading technology, educating people, and establishing more accountability for everyone whose actions influence FP&A will magnify the strategic value of the function.
For complete survey findings and detailed analysis, please download FP&A Empowerment: Benchmarks, Challenges & Opportunities.