The financial planning and analysis function in most organizations is limited to a group of individuals crunching spreadsheet files and reporting after-the-fact financial performance of the business. But there are organizations like my employer, General Electric, that have realized the full potential of FP&A. These organizations have put the FP&A function in the forefront and are deeply engaged in the strategic decision making process, both short and long-term.

What makes a FP&A team best in class and earn the right to have a seat at the table with senior leadership?

“A” is a big part of FP&A: One of my highly respected chief executives at GE told me as a leader of the FP&A team to make “A” a big part of FP&A. He was spot on because analysis is a core part of a successful FP&A team. The team has to drive analytics that support the leadership and the organization to make insightful and well-deliberated decisions. That’s easier said than done as most of the teams spend disproportionate amounts of time getting to the data rather than analyzing data. Therefore, it is very important to have a simplification and clear thinker mindset. Teams needs to prioritize the analysis, shed non-value added work, leverage tools and systems.

Partnership: One of the biggest traps for FP&A teams is to sit in their cubes and offices and crunch data. This is where the FP&A team get disconnected from the rest of the organization. It is important that each member of the FP&A team be engaged with the operating teams, be it supply chain, commercial, projects, etc., and work closely with these functions to develop a deep understanding of the business and industry, but also align the analysis to help the operating teams to make informed decisions.

Evolve: FP&A teams can quickly turn into dinosaurs if they don’t continuously evolve and be flexible and nimble. Businesses in today’s world are more global than ever and have become very dynamic as external factors (competition, regulations, etc.) continuously change. The analysis that was done a few years back and made perfect sense at that time may be obsolete and stale today. Therefore, FP&A teams need to have a constant pulse on the industry and business so that they can look at the horizon (18 to 24 months) to be able to adapt and redefine KPI’s and analysis to help shine light on those areas where the business needs to focus.

FP&A has a vantage point to be able to look at how different pieces of the organization come together from both strategy standpoint as well as tactical execution. FP&A teams can help the leadership to help connect the dots for the leadership team and highlight gaps and inefficiencies.

Vaibhav Mishra is Finance Integration Leader, Renewable Energy—GE & Alstom at GE Power and Water.