Survey shows FP&A benefits lagging investment

Companies are increasing investment in financial planning and analysis (FP&A), but not enjoying commensurate benefits from their expenditure, suggests analysis from the US-based best practice insight and technology company CEB.

Research based on data from members found that four in five companies realise less than half their potential productivity from budgets and forecasts, while a global survey of 138 FP&A directors found that budget and forecast improvement initiatives delivered on average only 51% of the cost savings and 54% of the value capture that they had anticipated.

Finance teams have made only limited progress over the past five years,” commented CEB’s senior director Anna Kipchuk, who oversaw the research. “There have been a lot of initiatives to automate processes and increase accuracy, but these have yielded very little of the expected cost savings that teams have set out to earn.”

Other responses from the FP&A directors surveyed showed that only 21% of internal business stakeholders regarded budgeting as a valuable activity, while 35% believed that forecasting was valuable.

Kipchuk said that other likely reasons for dissatisfaction with FP&A included the following:

  • Financial executives believe that the information they produce is not clearly linked to the key decisions critical to an organisation and is of limited value.
  • A significant proportion of budgeting and forecasting work is related to controls and assurance and not because leadership teams intend to use the data to drive decision making or resource allocation.
  • Budgets and forecasts are used as tools for management initiatives, even when it doesn’t make sense to do so. Although CEB’s research found that using budgets as a basis for incentives does not impact on process productivity, 90% of the FP&A teams surveyed said they still report using the budget as a basis for incentives.


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