Many CFOs are basing their strategies for growth on innovation and agility. So how can FP&A help drive better results? “Greater agility,” according to a recent study by the Hackett Group. FP&A teams need to develop new competencies in strategies like advanced analytics and talent development in order to help management make the right business decisions.
Six ways FP&A groups can execute on this decision-support role:
By helping companies identify and prioritize opportunities that would yield the most impact. That means applying more sophisticated analysis to surface actionable results, but also being able to share the results effectively with senior management.
By improving internal processes and adopting better technologies. This way, finance is free to focus on value-add work rather than punching in numbers.
By pinpointing areas in the organization where cost can be reduced further. This may be within their own department, but often the rewards are much bigger in other areas.
By adopting top talent management practices, and collaborating with human resources, finance can produce more high-performing staff and deliver intelligence to more areas of the company by partnering with business leaders.
By elevating finance to a leadership role, based on its deep bench of analysis competent staff, can ensure finance has a seat at the table and its recommendations turn into management actions.
More than anything, FP&A needs to beef up its enterprise performance management acumen. A lot of FP&A professionals are getting involved in measuring and driving the performance of the enterprise. That requires complete access to key information and understanding of the business drivers and developing the platform to deliver its findings to drive faster, fact-based change.
How to get started:
According to the Hackett Group, there are three steps finance can take to achieve these and other improvement goals.
Ensure goals and objectives are clear for everyone in the finance team, to help change the finance department’s culture.
Develop a vision and connect the dots between FP&A and the business. “Emphasize the importance of matching business needs and being flexible and adaptable as key capabilities,” the report noted.
Finally, it’s important that finance in general and FP&A in particular have clear KPIs against which they can monitor performance and share any wins with the rest of the organization to drive the credibility of the finance team as true business partners and then get invited to participate in higher value projects.