Last week, we walked you through the initial phase of the journey to profitable decision making: creating the capacity to cope.

Once your finance team has reached this position and are all operating from a single version of the truth, there is room to start addressing the data and creating what our Operations Director Adam defines as: ‘momentum towards new insights’.

Breaking out of the silo

If your finance team is still operating primarily within a bubble, creating insight that is only transmitted upward towards the board in a regular reporting exercise, this needs to change. FP&A has to be a business-wide activity in order to deliver value and drive profitable decision making.

Gartner have coined the term xP&A to describe this shift from siloed, finance-based activity to a whole-company approach. This extended planning and analysis refers to a way of working that sees the finance team engaging with the wider business on broader planning and performance management initiatives. It is an extension into any area of the organisation which produces business plans, including sales, marketing, and HR.

Gartner predicts that by 2024, 70% of all new financial planning and analysis projects will have an extended scope beyond the finance department.

As we highlighted when we outlined the overall roadmap to profitable decision making, for this to be successful, your FP&A team need to develop both the capacity to engage the rest of the business and the skillset to make the numbers accessible and user-friendly in order to tell a story to capitalise on that engagement.

From reporting on to running the business

Once your finance team are more directly involved with the rest of the company, they will be able to start feeding other business units with the numbers they need to make an impact. Not only will the team be a more linked up part of the process, having automated their foundation processes they’ll be in a stronger position to access information without having to extract, re-structure, consolidate and present the numbers each time.

Another key shift that can take place at this stage of your journey is that the finance plan evolves from being something that is just applied as an overlay to the business to becoming an integral driver in the planning process. With the world in constant change at the moment, it’s important that decisions are being made at operational level based on a centralised single version of the truth. Forecasts can never be 100% accurate, but ultimately they’re the closest picture available and a dynamic, rolling forecast process allows everyone to work from the same best version. If each function were making decisions based on siloed forecasts which were already obsolete by the time they were being considered, then no-one would be in step with each other and profitable opportunities would be missed.

Scenario plans in harmony

With all functions of the business having access to the resources required to adopt a collaborative approach, decisions can be made. Once everyone is fluent in the underlying numbers, useful dialogue can be established which will increase company-wide engagement in the larger plan.

We’ve previously expanded upon McKinsey’s insight into the role of FP&A in helping to navigate the current crisis. The approach to cash conservation is particularly appropriate in contextualising our suggestions in this post:

“The financial-planning team will need to clarify the company’s cash-conservation approach in a COVID-19 world, including a near- and midterm evaluation of cash flow. This approach should be applied and communicated to each functional and geographic area; everyone should understand what will be spent on operations, sales, marketing, and other critical areas.”

Taking the required steps to move from coping to collaboration will result in a company-wide shared view of where the organisation is going. Once that’s in place, everyone can start to pull in the same direction and move closer to their end destination.

Progressing on your journey to profitable decision making is more accessible than you might realise – the foundations of a strong system for your FP&A activities can be achieved within the capability of Planning Analytics on Demand. Take this opportunity to drive more strategic planning and get in touch today to discover exactly how valuable Planning Analytics could be to you.

Simon Bradshaw

I have worked in finance and business systems development since 2001 and am an associate member of the Chartered Institute of Management Accountants. In 2016 I became a founding member of Spitfire Analytics, a consultancy specialising in IBM Planning Analytics. We are committed to building long-term relationships across all industries. I focus on my CPD through CIMA and IBM badges, ensuring I am always abreast of best practice and developments within the industry.


Spitfire have a depth of understanding not only in Cognos/TM1 technologies, but also in finance and accounting. It is this combination of expertise and their ability to get to the heart of business problems that has resulted in such confidence in their delivery and capabilities. The insight and value-add they have brought is evident.

- Peter Smith, Head of Solution Delivery, Edrington

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