How has the role of Corporate FP&A changed in the past decade?

While new technologies such as AI, machine learning, and automation are designed to harness big data for more reliable planning and forecasting, they often come with challenges that must be addressed for optimal results. When evaluating FP&A technology, it’s essential to consider the following aspects: Does the technology/solution include an inbuilt ETL layer for easy, finance-friendly data transformation and preparation? Can data access be controlled at a highly granular level to ensure compliance and governance? Is data validation possible at almost every step of the FP&A process to ensure accuracy? Can data be sliced and diced at the desired level by FP&A professionals to uncover deeper insights?

The data revolution in FP&A isn't just about quantity, it's about harnessing new data sources for a holistic view. Using social media data to gauge brand perception and inform marketing strategies. These non-financial data points, coupled with traditional financial data, offer a richer tapestry of insights for strategic decision-making. However, with this power comes responsibility. FP&A professionals must prioritize data governance – establishing frameworks to ensure data accuracy, security, and ethical use. Building a data-driven culture is key – fostering collaboration across departments to leverage diverse data sets and translate complex insights into actionable business strategies

Access to data has really shifted the focus of FP&A to external & internal drivers to plan for future growth, but many companies still struggle to use data to its fullest potential. Emerging Enterprise Planning tools over the last decade have now made it simple to consolidate data from various sources to allow companies to develop insights not previously possibly. With the introduction of ML & AI technology, modelling future outlooks and scenarios allows companies to use this data to strategically shape company objectives and growth.

The dynamic business landscape demands FP&A professionals to ditch static spreadsheets for agile planning. Embrace rolling forecasts – continuously updated plans that reflect the latest market conditions. Scenario planning empowers you to pressure-test strategies against various possibilities, from economic downturns to emerging market opportunities. Move beyond basic financial metrics and incorporate driver-based modeling – analyze the key factors influencing your business performance, enabling proactive adjustments to stay ahead of the curve. Foster strong relationships with senior management to ensure alignment with strategic goals. FP&A's agility is instrumental in navigating uncertainty and steering the business towards success.

The FP&A function is shedding its back-office persona and transforming into a strategic growth partner. By proactively recommending resource allocation adjustments or targeted marketing campaigns, FP&A can directly contribute to revenue growth. FP&A's role in measuring and improving performance goes beyond financial metrics. Develop key performance indicators (KPIs) that track the success of strategic initiatives, allowing for course correction and optimization along the way. FP&A's ability to translate complex data into actionable business intelligence empowers leaders to make informed decisions that drive innovation and propel the organization towards achieving its full potential.

FP&A now uses more data and better tools to make accurate predictions and suggestions. FP&A also works more closely with other parts of the business to help them achieve their goals. (Thanks to technology.) Earlier, very few companies would have FP&A as a separate team, but now FP&A is more important and valuable for the business and an important part of the structure of most businesses. P.S. I have not been in FP&A for too long. My career is less than a decade old, and my views are based on my limited experience.