Rethinking the FP&A Operating Model
A Leading Practices White Paper November 2012
Aggressive competition, intrusive regulation, capital markets volatility and business complexity — these forces can conspire to overwhelm any organization today. To stand out from competitors, companies must respond nimbly to both market pressures that impact their organizations and business opportunities that emerge. Today, chief financial officers (CFO), therefore, must be focused on providing near real-time business insights to key decision makers so they can make smart and timely decisions as internal and external challenges unfold.
Within the CFO’s organization, the responsibility for tracking, assessing and reporting corporate performance normally falls to the Financial Planning and Analysis (FP&A) group. In order for FP&A to perform well, it must partner with various corners of the organization to gather and share necessary insights of financial performance throughout the company. FP&A organizations also need a solid operating and accounting foundation based on appropriate standards, technology and processes all with a view to optimizing the overall finance operating model. Further, the information necessary to generate these insights must be easy to access in a timely and accurate fashion to truly engender better and more timely decision making. Leading companies are paying special attention because opportunities identified by FP&A can generate millions in savings at Fortune 2000 firms. In the last few years, FP&A organizations grew out of a need to process huge volumes of data and were pressured to conduct what-if and other ad hoc analyses, many of which did not add value: (1) In the current economic climate, companies can ill afford these types of analytic services.(2) By contrast, an optimal FP&A service delivery model can help business units make better decisions, anticipate competitors’ actions and reduce risks — activities that have become essential to corporate health in an era of complexity.
FP&A service operating model optimization is a key part of our finance transformation methodology at FTI Consulting. Our integrated approach determines current FP&A efficiency and effectiveness, identifies and prioritizes specific improvement areas, and creates an operating blueprint and migration plan to deliver these capabilities to our clients. Optimizing the FP&A operating model lowers information risk and provides a healthy return through cost savings and efficiencies.