From what I'm hearing, Financial Planning & Analysis (FP&A) is becoming the "cool" department within Finance that many professionals seek to work in. Why? Probably because FP&A is less focused on the day to day transaction processing and more focused on forward-looking analysis and strategy for the business.
I recently had a chance to connect with Nilly Essaides, the Director and Practice Lead, Financial Planning & Analysis (FP&A) at the Association for Financial Professionals. Here's what she had to say about what's new and what's coming in FP&A.
John: Please tell us about the AFP and your role there.
Nilly: The Association for Financial Professionals is the professional society that represents finance executives globally. We provide career development resources and unbiased content and established and administer the Certified Treasury Professional and Certified Corporate FP&A Professional credentials, which set standards of excellence in finance. Our AFP Annual Conference is the largest networking event for corporate finance professionals in the world. We advocate for the finance profession and act as thought leaders in the finance arena, spotting new trends and providing a forum for the sharing of best practices.
John: What are you seeing as some of the latest trends in FP&A?
Nilly: FP&A is becoming the analytics hub of the organization. It sits in the center of multiple data flows and pulls information from multiple sources to run sophisticated analyses that solve real business problems. FP&A is instrumental in building a data-driven decision-making culture in the organization. Preliminary results of our 2016 FP&A Benchmarking Survey, conducted in collaboration with IBM, show that one of the main forces driving this is the accessibility of real-time internal and external data on demand.
FP&A is also becoming a true business partner. It works closely with business leaders to help them improve their financial results by getting deep into the operational metrics. I lead a 36-member FP&A Advisory Council. Nearly all of the members count business collaboration as one of their chief roles. To successfully perform this role, they must acquire new skills. They need to know how to tell stories about numbers. They need to have good communication and influencing skills, develop their business acumen, and learn how to build credibility with the business operators.
John: How do you see the FP&A function changing now and in the future?
Nilly: FP&A is a very dynamic field and is going through rapid transformation. The function is becoming increasingly forward-looking. It’s using new techniques and technologies to focus not on what happened or even what’s happening but on why it’s happening and what’s likely to happen next. The ability to ask and answer tough questions, to spot and explain trends and to run what-if and scenario analyses is making FP&A a valued business partner. Going forward, the availability and accessibility of big data, combined with the trend toward integrated planning (the merging of operational and financial data for planning and forecasting purposes) as well as and greater reliance on predictive analytics will only enhance the role of the office of the CFO as a strategic partner to the CEO.
John: How do you see new technologies impacting the FP&A function?
Nilly: New technologies are changing the way FP&A goes about its daily work. While 50% of companies still rely primarily on spreadsheets, many others are migrating to dedicated financial planning systems that allow them to pull financial and operational data from across the enterprise and pull it into a single data warehouse and run it through increasingly sophisticated analytics engines that support smarter business and management decisions.
These new tools began as cumbersome, on-premises solutions but are now delivered via the cloud. They are a cheaper and faster to implement, have friendlier interfaces and can be upgraded overnight. Most offer self-service options that help disintermediate the IT function and democratize the analytics and BI tools that were once available only to a handful of people. As a result, FP&A can ask better “why” questions and answer them faster. It can look further into the future, and it can offer greater value to the business and senior management.
While this ongoing transition is far from over, there are signs of a new paradigm shift. From using the cloud as a host, a handful of new systems are switching to using the cloud as a computational platform; they are relying on the same technologies as Google’s powerful search engine to pull together operational and financial, internal and external, structured and unstructured data to provide FP&A with a holistic view of the enterprise to enable true integrated planning.
They see through the layers and across functional silos, all the way down to the line-item level. Unlike the current cube-based applications, they have unlimited dimensions so they don’t have to rely on pre-processed data or averages and can easily handle millions of data points and leverage artificial intelligence to come up with even more sophisticated predictive models and pattern-recognition tools. That’s the future.
John: What are some of the key resources AFP offers for FP&A professionals?
Nilly: We advocate for the finance profession, spotting new trends and providing a forum for the sharing of best practices. Our unbiased content includes articles, in-depth guides and research reports.
Since communication is key for professionals, we also have a strong focus on networking opportunities. There are intimate, FP&A roundtables, as well as our larger event, the AFP Annual Conference.
We then have our career development resources. Virtual webinars and multi-day seminar focus on honing one’s skills and our Certified Corporate FP&A Professional credential signifies mastery of core FP&A knowledge and principles.
John: Please tell us more about the FP&A Certification program, how does this work?
Nilly: The financial planning & analysis profession has experienced rapid growth over the past decade and there is a significant amount of knowledge required to perform at the highest level. The FP&A Professional credential validates a unique skillset and signifies that the holder has the right education, experience and commitment to advancing their career in the corporate financial planning & analysis profession.
Candidates have to meet program entrance requirements and additional education and experience requirements, in addition to passing two exams. Exams use multiple choice and spreadsheet based questions to assess mastery of critical skills, knowledge and abilities involved in financial planning and analysis.
John: How can readers learn more about the AFP and its services for FP&A professionals?
Nilly: You can learn more about AFP’s FP&A resources by visiting our Financial Planning & Analysis topics page. Here’s you’ll find the latest articles, guides, videos and events.
To learn more about the Certified Corporate FP&A Professional credential, visit our dedicated certification site.
John: Thanks Nilly, for sharing this information. Very exciting times for FP&A indeed. Best of luck!