Financial planning and analysis (FP & A), like many finance disciplines, has undergone significant changes with the increasing use of AI and various software platforms to support data analysis and communications. As CFOs continue to lead FP&A activities, along with their teams dedicated to research, analysis, and planning, understanding the importance of the FP&A role and including the “three cornerstones” of FP&A strategy into the process is an important step to maximize its role in overall financial planning.
Financial Planning and Analysis – an Important Strategic Opportunity
The FP&A process offers CFOs an excellent opportunity to work with cross-functional teams within an organization, using financial data to analyze past performance of activities and programs and to incorporate such data into strategic planning.
The data analyzed throughout the FP&A process can be used in multiple ways. For example, when examining the data, trends may appear that lead to exploring new opportunities. Because FP&A planning includes data from multiple touchpoints throughout the organization, such as operations, marketing, donor relations, and more, it can help leaders see the big picture and refine their plans based on data.
The data accessed through the FP&A process should be both collaborative and actionable. Thankfully, with modern AI-enabled platforms, most finance teams achieve both goals with their data.
The Three Cornerstones of FP&A
Numerous leaders cited in an online CFO article shared their vision for the “three pillars” of smart FP&A planning. We like to call them “cornerstones” because they serve as the foundation of good financial planning. The cornerstones include:
- Technology-enabled planning: Using the right software, incorporating AI/GenAI for data analysis, and ensuring plentiful cross-functional data are all part of technology-enabled financial planning and analysis. With these tools, teams can perform advanced analysis without it becoming a time-consuming activity.
- People power: After using software platforms to perform data analysis, people should take time to review them and use the information accordingly. It’s the human touch—the inherent creativity, knowledge, and awareness that people bring to the financial planning process—as well as cross-functional teamwork that makes it work best.
- Leadership: The last cornerstone is leadership. CFOs can take the technology-created inputs and human-generated insights and form them into actionable information for discussion. Then, based on the data analysis and team-driven insights, CFOs need to lead the discussion around the strategic plan. This empathetic, collaborative approach helps all departments get the most from the process.
Working with Data, Leading with Empathy
Financial planning begins with data. But data is just the beginning. Teamwork, planning, sharing, and collaborating on the final plans based on the data is the next step. For CFOs committed to excellence, leading the discussion that ensues with empathy and patience helps the organization benefit most from FP&A activities.
Welter Consulting
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.
Recent Comments