In a modern business landscape, it has become apparent that organisations need to embrace digitalisation in order to ensure longevity and success. To achieve this, it is vital for companies to become more agile to meet the challenges of the fast-paced digital economy, and have reliable access to actionable insights across all levels of their organisation.
The limitations of traditional financial planning and analysis (FP&A) approaches are becoming increasingly transparent, with CEOs putting pressure on finance teams to lower the costs of planning and budgeting cycles while expecting the timely delivery of real-time data insights to inform executive decision-making.
Extended Planning and Analysis (xP&A) as an approach to build upon FP&A solutions by extending their scope beyond the finance domain into other areas of enterprise planning and analysis. This means the requirement to extend FP&A capabilities extend beyond the finance department into other areas of the business, including supply chain, marketing, human resources, and sales Is imperative.
xP&A takes the best financial planning and analysis capabilities – continuous planning, forecasting, advanced analytics, and performance monitoring – and extends them to business users across the organization. This helps to eliminate the traditional barriers between finance and operations and connects strategic, financial, and operations plans in real-time.
The main incentive for organisations to embrace xP&A is the potential to create a more streamlined and effective planning process that unifies strategic, financial, and operational aspects, and produces a more accurate, valuable picture of the present and future state of their business. With ongoing access to enhanced strategic insights and predictive analytical tools, executives are also able to anticipate potential risks in dynamic modern marketplaces and make important decisions with more confidence.
xP&A breaks down departmental silos and creates a single view of plans and performance in real-time. Business leaders can use this view, along with cross-functional reporting and analysis tools, to understand the impact of decisions on each department within an organisation.
Many companies struggle with conflicting versions of the truth – which is usually due to disparate IT systems and massive volumes of data housed in different places. xP&A creates a single source of truth, so planners and decision-makers can all work with the same set of numbers and information.
With xP&A, strategic, financial, and operational plans are synchronized – ensuring the entire business is in alignment and working toward a shared vision of success. xP&A also makes it clear how one department’s activities impact another, which encourages teams to collaborate and align on priorities.
With a cross-functional view of the business and a single source of truth, leaders are better equipped to understand what’s happening in real-time and make decisions on the fly. Tight business alignment also helps them rapidly seize new opportunities, spot and mitigate risks, identify ways to cut costs and inefficiencies, and rapidly respond to situations.
Continuous planning, where plans are continually updated based on changing conditions and events, is central to xP&A. When a change occurs in one plan, all related plans are automatically updated. This automation minimises manual work and keeps everything in sync, even in times of rapid change.
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