As a result of the underinvestment, the legacy FP&A data and technology landscape often leads to ineffective decision-making, inadequate collaboration with the business and low team productivity. Common challenges include:
- Value-add analysis and collaboration with business is secondary to collecting data and managing the process. From 2010 to 2019, there has been a minimal shift in the time allocated to gathering data and administering the FP&A process (77% vs. 75%) and the time allocated to providing value added analysis (23% vs. 25%)1
- Absence of a common, unified layer of organizational data or a “single source of truth” through normalized data sets and defined hierarchies
- Intuition-based decisions based on “black box” spreadsheets that are too simplistic and optimistic
- Reporting that is too slow because of inadequate data structure and ad hoc analysis
- Inadequate use of scenario modeling technology to compare investments and risk
- Lack of timely data and inefficient data integration that leads to reconciliation of disparate systems
COVID-19 is forcing businesses to fast-track adoption of digital technology, and this unanticipated push is driving targeted investment in planning and analytics capabilities.
Organizations are facing unprecedented and unique challenges with the COVID-19 pandemic, and FP&A functions are under intense pressure to synthesize the financial ramifications of the disruptions as well as forecast the impact of operational and tactical options for their business.
Existing FP&A tools and processes are not fit for this purpose, and teams are under strain to deliver “what if” solutions in a cycle time measured in hours rather than days or months.