Boston knows a good revolution when it sees one. So there’s probably no better place for finance executives to learn how they can move their planning, forecasting and analytics from where they’ve been to where they need to go.
Next week, CFOs from around the country will muster in Boston at two Innovation Enterprise conferences – the FP&A Innovation Summit and the Finance Transformation Summit – to hear firsthand how their counterparts from companies like Walmart, TIAA-CREF, Kraft and Sony have revolutionized their own financial processes. They’ve freed themselves from the tyranny of spreadsheets and annual budgets and opted for flexible, real-time environments that enable continuous planning and extend FP&A beyond a few users in finance.
I’m excited to be speaking at both conferences Monday – the Finance Transformation Summit at 9:40 a.m. and the FP&A Innovation Summit at 4:10 p.m..
Modern FP&A is now critical for the ongoing and future health of businesses overall. It’s a new era: information moves faster than ever, and there’s more information available to be analyzed and applied — traditional FP&A platforms and processes weren’t built for this. Consider that the average financial close slogs on for 23 days, and that it takes the average organization six months before the impact of any given business decision is fully understood. What CFO wants to run a business on six-month old data?
In my talks on Monday, I’ll draw on real-world experiences by Tidemark customers to communicate a range of concepts and best practices that should be helpful to CFOs considering their next steps. But here’s a quick primer on the new set of business requirements for FP&A:
- Get out of the spreadsheet jockey and cube business. Finance spends too much time managing spreadsheets and multi-dimensional cubes. To be competitive, they should be shifting valuable FP&A resources to analysis, assessing new revenue opportunities, and other activities that add value to the business.
- Drive continuous business alignment. Finance is being asked to make sure corporate strategy and numbers are in total alignment – not just once a year but constantly.
- Remove constraints on volume, type and timeliness of data. Every business now runs on data, and CFOs need to find ways to consolidate and analyze the huge volumes of internal and external data that can inform decisions and forecasts.
- Deeply engage at the edge. In a typical organization, only 11 percent of employees are in any way involved in FP&A. That’s not nearly good enough if companies hope to respond at the pace of today’s business and operate with a new degree of precision. The need a way for decision-makers at every level to access real-time data and run the what-if scenarios that will show them the implications of their decisions.
- Stop arguing about the numbers. It’s hard to work from a single set of numbers when FP&A processes are plagued by disjointed data silos and lag times. Finance executives need a modern system that and gets everyone working from the same set of real-time numbers.
- Don’t accept tools that force you to conform. Historically, finance has had to bend the way it works to fit the demands of IT systems and Excel spreadsheets. It’s time for finance to make the demands – and to start using solutions designed around how finance works.
Modern FP&A has become a business imperative, and the list above sets a high bar for any FP&A solution. In Boston, I’ll be exchanging ideas with CFOs who may already be questioning whether their current processes can come anywhere near that bar. And I suspect many will be wondering if it’s time for a revolution.