In recent years, corporate financial planning and analysis (FP&A) teams have taken on an increasingly strategic role due to volatile markets, global economic uncertainties, and the increasing complexity of business operations. FP&A provides a structured approach to financial management, ensuring that businesses are prepared to meet their financial goals and navigate uncertainties.
The collaboration between finance business partners and their stakeholders plays a big role in FP&A's ability to meet the new requirements of the job. According to FP&A expert Christian Wattig,
“The goal of a finance business partner is to become a strategic advisor to the business, driving sustainable growth and profitability.”
Finance business partners are often supporting numerous stakeholders, including heads of business units or functional leaders such as the organization’s sales and marketing leaders.
In our recent study to quantify the state of finance business partnership, we surveyed over 150 FP&A leaders in the U.S. to shed light on the complexities of stakeholder collaboration.
Collaboration is difficult
41% of FP&A leaders believe plan accuracy could be improved through more effective stakeholder collaboration.
Today, collaboration is difficult and time-consuming according to our survey respondents. In fact, only 26% involve stakeholders in both annual planning and reforecast processes. It’s worse for teams that haven’t invested in modern FP&A tech. Only 20% of teams that plan in spreadsheets or legacy tools involve stakeholders in both annual planning and forecasting.
Data challenges block collaboration and plan accuracy
While lack of stakeholder engagement was cited by many, it’s clear that poor data management is seen as the biggest obstacle to collaboration.
These data-related obstacles fall into three categories:
1. Lack of Real-Time Data
FP&A leaders need data, metrics, and KPIs to enhance decision-making, improve forecasting accuracy, and drive business agility, with 24.84% of leaders agreeing that lack of real-time data blocks collaboration. We’ve identified three key areas on how real-time data supports FP&A leaders:
- Effective Performance Monitoring: Continuous monitoring of performance metrics and KPIs to improve timely interventions when performance deviates from targets and goal alignment.
- Enhanced Risk Management: Better understanding of potential risks and their impacts. This may include early indications of overspending, hiring that is off-track, and lower cost of acquisition. These are all signs that an organization is not on plan.
- Optimized Resource Allocation: Assurance that resources are allocated where they are most needed and most effective.
2. Manual Preparation and Manipulation of Data
This process is incredibly time-consuming, often diverting valuable time and resources from more strategic tasks that could add greater value to the business. Collecting data from multiple sources manually can take a significant amount of time, especially if the data is stored in disparate systems.
Human error is an inherent risk in manual data entry, and simple mistakes can significantly impact the quality of the data. Manipulation of data using complex formulas in spreadsheets increases the likelihood of errors that might go unnoticed until they cause substantial problems.
Our survey findings revealed that 18.3% of FP&A leaders say manual preparation and manipulation of data creates inefficiencies in plan accuracy. This points to the need for modern technology to address this challenge.
3. Data Hygiene: Lack of 'Source of Truth' Data
Effective strategic finance hinges on extracting intelligence and insights from data silos. Data hygiene is a common struggle for FP&A leaders, with 16.34% of survey respondents (and poor data quality) hindering laboration. Poor plan accuracy follows in tow.
FP&A software can help
Accurate data begins with effective technology that supports data management. Integrating data sources enhances accuracy, consistency, efficiency, and overall data integrity. Establishing a single source of truth for financial data across all teams boosts FP&A's ability to collaboration with the business.
When seeking the best FP&A software for your business, it is important to consider how well it can help you address data challenges. FP&A software like Stratify can help you with real-time, seamless integrations, master data management, automated reports, stakeholder collaboration, and more!
“With Stratify, the system updates automatically for us. Everyone sees the same accurate, real-time data together in one place at the same time.” - Tina Lai, Finance Manager, Spotnana
Spend less time on data-related challenges and more time creating effective finance business partnership.
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