Business executives know that they should tap into the power of advanced data analysis and data visualization. For financial planning and analysis (FP&A) professionals, accomplishing this is no easy task.
“It’s less clear in finance how to apply data analytics and smart analysis,” noted Andreas Schertzinger, head reinsurance FP&A, managing director for Swiss Re. “Can we actually do it? Do we have the right tools or support? Would the business even ask us?”
Schertzinger, who led a lively discussion on the topic at AFP’s recent FP&A Leadership Summit, said that FP&A professionals spend plenty of time analyzing business problems, but could benefit from improved business partnering. “If you invest more in understanding and defining the problem, it will help improve your analysis,” he said.
In addition to better partnering with business units, Schertzinger argued that there is less of a need for a smart data management system assuming the data is correct. As attendees noted, this is not a given. “We are customers of data at the end of the chain and we analyze it,” one FP&A professional attendee said. “We discovered flaws in the data so you get dragged into discovering the process and source of the data.”
Another attendee agreed: “You lose time cross-checking and correcting the data. You end up crunching the data. If your data is mistrusted, your analysis is as well,” he said.
Three ways to improve business partnering
Ask questions: An FP&A manager for an oil-and-gas producer said she killed the dreaded ad hoc report requests from business units by asking a simple question. “‘How do you use it?’ Have the courage to ask questions before this becomes a routine request,” she said. “For a non-finance person, if you ask this question and they don’t know what they’re using it for, it forces them to think before grabbing data. Then they say, ‘I don’t need that and you take back hour of your time.’”
Another FP&A manager added, “It’s all about getting closer so you get away from being a data group to an analytical group.”
Join the unit: One FP&A manager for a telecom said the problem is the business process creating the data. “You have different definitions. What’s a sale? What’s a customer?”
The FP&A manager of the telecom offered a solution: pair your FP&A staff with business unit to better understand their processes and better define the data. “One thing I do is try to understand their daily data requests,” he said. “The more data you put in, the heavier the reporting is. So we work with our internal customers to see if they really need a report.”
The FP&A manager assigns a member from his six-person team to sit in customer service once a month to better understand their jobs and their reasons for their data requests. “They’ll sit in a call center and see what the customer service reps are doing while talking to customers so they can translate requests for the FP&A team,” he said. “By doing this, you are really becoming internal business partners. You can be proactive with them the more you are involved with them, and you can create solutions before they even know there’s a problem.”
Add IT staff: Another FP&A manager in attendance tried a different tactic. He added an IT staffer to his FP&A team to help manage data sources and streamline requests. “They’re in the FP&A team now. ‘Technical IT’ is what we call them,” he said. “They understand better what we do. They can turn what we do into a language the other IT people can understand.”
The technical IT staff don’t perform FP&A analytical work, he added, just pure “definitional” work. “They developed analytical tools for the FP&A staff; we have our own software developers now, basically,” he said. “It helps structure the problem better and it’s definitely quicker at coming up with automated answers quicker and building automated data tools quicker.”
More FP&A resources are available at http://www.afponline.org/FPA.