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FP&A: Calculating Its Real Value to the Organization

  • By Graham Buck
  • Published: 6/18/2015
ATLANTA -- Financial planning and analysis continues to gain visibility as a vital function to the business. At an FP&A roundtable held by AFP last week, practitioners weighed in on FP&A’s growing prominence and assessed its value to the organization.

Attention on FP&A is likely to increasingly extend beyond North America, noted Brian Kalish, director, finance practice lead for AFP. “Everything we’ve done to date has been roughly 75 percent US and 25 percent the rest of the world, but those percentages will likely be reversed over the next few years as FP&A gains hold in countries such as Korea,” he forecasted.

Calculating the value of FP&A was a topic returned to regularly in the discussions. Kelly Myrick, finance director for AT&T’s Cricket Wireless, acts as an advocate for it within his group. He believes that as more professionals test for AFP’s Certified Corporate FP&A Professional credential, they will increasingly recognize its relevance to their job role and it will gain even more momentum.

“It’s far more relevant than the certified public accountant (CPA) qualification, which unless you’re an accountant is only of limited value,” he suggested.

However, T.J. Wood, who is director, finance integration for CHEP and was formerly a finance director for Johnson & Johnson, added that the CPA certification is still in great demand as it is universally recognized. She also believes that the Institute of Management Accountants (IMA), the worldwide association for accountants and financial professionals, “could do a much better job of promoting itself and emphasizing its value”, particularly to college students.

Kalish said that he and his team have talked with many students around the U.S. on qualifications, but agrees that “schools have to get excited about FP&A, particularly as the template for areas such as predictive analysis.”

Wood noted that many of today’s financial professionals face a common challenge in their workplace; that of having to tackle increasing complexities in their role and doing so with fewer people as their companies steadily cut costs.

At the same time, employees who can be categorized as millennials or Generation Y - those born post-1980 - are having a “significant impact” on corporate workforces. “They don’t want a working week of more than 40 hours, although at the same time they do expect the same salary,” noted Wood.

A seat on the board

Kalish raised another FP&A-related topic that regularly features in discussions; that of business partnering. “How do you [as an FP&A professional] get a seat at the board table?” he asked. “What happens if your employer wants recourse to you 24/7?”

Ginger Bless, of rental store chain Aaron’s, said that her company has seen several changes of chief executive over the past couple of years but has now been able to sit down with its newest CEO, “who wants treasury to provide a good forecast and to be able to report against it.”

Her verdict is as follows: “You want to have a seat at the table and for people within the company to come to you.” At the same time it can be difficult to determine exactly where the line is that separates FP&A from business intelligence (BI) or data analytics.

For Brian Dykes, strategic business analyst for parcel delivery giant UPS, it’s a different situation. “UPS has a number of advanced analytics individuals and groups and we’ve centralized our data repositories,” he reported. “At the same time, we’re struggling with how to create a competency center for all of these individuals with differing skill sets, so that we can allocate a specific project to the right individuals.”

Colleague Patti Humble, UPS’s director of corporate planning, noted that each part of an organization brings its own analysis and perspectives on what is needed to raise it to the next level. “It’s FP&A’s role to pull all of those disparate pieces together,” she suggested.

Discussion also turned to ensuring that AFP’s FP&A exams are what Kalish described as “tough enough” to have value. “We have to be able to prove—in court if necessary—that each question in the exam is there because the global FP&A community says that it should be there,” he suggested.

Added Kalish: “We don’t want anyone taking the exam who doesn’t have a reasonable chance of actually passing it. Someone with three to five years’ experience should have a 50% chance of passing it on the first attempt.”

Learn more about AFP’s Certified Corporate FP&A Professional credential here.

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