FP&A teams should spend more time advising management on strategy and less on lost-value work. That’s the picture emerging from Adaptive Insight’s Q3 CFOIndicator survey, released on August 31. According to Adaptive’s Founder and Chairman Rob Hull, “the finance organization is still mired in grunt work.”
The survey reveals that FP&A is doing its day-to-day activities without getting time to move into more insightful and collaborative efforts. When asked to rank their team’s skills today, CFOs put advising the CFO and the C-Suite on strategic decisions last. The top two skills were management reporting and data gathering.
“They’re stuck in the tactical,” said Hull. That’s because many of the FP&A core processes are still taking too long, “instead of being more efficient and shortening the cycle time and standardizing repetitive work through automation.”
Nearly half of CFOs in Adaptive Insights’ survey that said they aren’t planning to hire this year said they plan to close the gap by investing in technology. “They are not replacing people with technology,” Hull said. Most CFOs believe they’re adequately staffed. “What they want is their staff to spend more time on higher-level tasks. Technology investment frees up the finance’s time to be more analytical and collaborative,” he said.
That technology can be the path to better resource allocation is supported by preliminary results from AFP’s first annual FP&A Benchmarking Survey. The survey shows that companies that spend under 10 percent on systems complete the budget in 90 days, whereas those that spend between 10-20 percent do so in 75 days; they also spend half as much time on grunt work. (AFP’s inaugural benchmarking survey, conducted in collaboration with IBM, will be released October 4.)
Better technology also means FP&A can become more forward looking and give the business insight into what’s coming next. “FP&A can forecast faster and more collaboratively, and can look further into the future,” said Hull. Not only can it forecast more frequently, according to Hull, it can also perform more scenario analysis and thus help the business be better prepared and enhance performance.
Things are about to change: CFOs predict FP&A will double the time it spends on strategic tasks by 2020.
How will it get there? According to the survey:
- It will invest more in core and analytics technology;
- It will develop better analytics and modeling capabilities; and
- It will engage more with the business and enhance its business partnering skills.