Building the Business Case for FP&A Transformation

The business case for justifying the FP&A change is not always easy to create. Often, FP&A has no vision or strategies. Even when these do exist, they are often not aligned across senior finance and accounting leadership, which typically results in partial implementation or inadequate adoption.

By first creating the FP&A vision, strategies, and action plans, it becomes far easier to write the business case and then gain C-level support and approval for FP&A transformation.

Reading the Tea Leaves

The vision articulates the end state of transformed FP&A. It should be a challenging and aggressive view of the future of FP&A. The best visions do not require the organisation to interpret the vision statement. It should be articulated in a way it could be read and understood by anyone, inside or outside of the company.

  • From a C-level suite standpoint, it should be written in a business-friendly way, so functional leaders will be supportive of the FP&A transformation plans.
  • From an organisation standpoint, it should be written in such a way that employees would be inspired and excited about the future.  

The vision may be scary. The best vision articulates a future state, which is difficult and time-consuming to achieve. The chief financial officer (CFO) and finance leaders may need to over-communicate, so their organisation understands and commits to the vision. However, make sure that the vision is not too far beyond the realm of possibilities.

Building Blocks of Strategy

The FP&A strategies are the building blocks required to get to the end vision.

The critical choices are determining which aspects of FP&A need to be transformed to move from current to future state. The FP&A tasks in a company vary from strategy development, new business modelling, forecasting, budgeting, management reporting, analysis, working capital, cash forecasting, and capital spending. It can sometimes be quite difficult to determine which of these tasks should change, how they should change, and when the interventions are required.

There is little chance of success if you attempt to fix all areas of FP&A at the same time. The strategies can – and will – evolve over time as the FP&A area is step-changed, according to the transformation plans and timelines.

The challenge for any CFO is to determine the right strategies and exact sequencing to support the FP&A vision. The company vision statement is the first place to start when determining FP&A priorities. The FP&A vision and strategies should be consistent with the overall company plans.

Turning Vision and Strategy into Action

We now turn to the detailed action steps required to turn vision and strategies into reality. This is the point where the “rubber meets the road.”

This is also the step in the visioning process where any professional checks and confirms sufficiency of resources, funding and allotted time to complete the end-to-end FP&A transformation. If anything is missing, you will want to go back and request more funding, resources and time. Should any of those three be missing or inadequate, go back to the CFO or CEO and reassess the vision and strategies.

A few examples of potential actions to transform FP&A include:

  •  Create and leverage multifunctional networks.
  •  Develop pricing tools to increase sales growth.
  •  Develop budget tools to decrease overall marketing spend.
  •  Expand locally developed tools or processes into all business units.
  •  Create and roll out best in class tools, work processes and organisation.
  •  Create and roll out a global process ownership design.
  •  Develop simple-to-read, easy-to-access, and anxiously anticipated reports.
  •  Develop a network to share/reapply best practices.
  •  Create training materials to build overall capability in the organisation.

Once the vision, strategies, and action plans are complete, it should be reviewed once more with the C-level functional leaders for approval. The approved document can then be shared broadly with the organisation (finance and accounting and all other functional leaders). If there is not unanimous support for the plans then continue to refine until there is full support.

The future of FP&A is now clearly articulated. However, this does not ensure a successful FP&A project. Each and every company has a unique culture that may need to be adjusted prior to launching the FP&A project.

Document and Approve the Business Case

By creating the FP&A vision and strategy, the detailed action plan, and identifying areas of company culture that need to be improved, it is now much easier to formalise the business case summary.

The business case summary encompasses:

  • Business rationale for the change: What is driving this change? What is the business issue being fixed? If you are unable to articulate a clear issue, challenge the need for the transformation.
  • Scope of the full project: What is being transformed? Is the transformation focused on one area of FP&A? Or all areas?
  • Benefits realised: What will the transformation project achieve? Is it to deliver cost savings, higher sales, improved productivity, improved analysis, transforming data into insight, internal controls, or something else? The benefits should be clear to all and possible to measure.
  • What company cultural aspects need to change: The required cultural changes should be clearly spelled out in the business case. It should include what support is needed from the C-level functional leaders.
  • Required investments or resources: How much is the investment? Which resources are needed? Internal and external? Provide a high- and low-level estimated range of spending and resources.
  • Significant interdependencies: Are there other company projects or initiatives impacting the FP&A project? This could be across the organisation – from planning, to marketing, to manufacturing, to sales, to new accounting systems.
  • High level timeline: How long will it take? What is the impact if it takes twice as much time? Make sure C-level leaders are comfortable with a long and painful journey. The benefits will outweigh the pain but get leadership support to the inevitable bumps in the road.
  • Review and approved: The C-level functional leaders should now review and approve the plan.

The Path Forward

The vision, strategies, and action plans have been full developed and aligned with the senior leadership of the company. The business case summary has been documented and approved for implementation.

The path forward is:

  1.  Assign a FP&A project owner for the transformation.
  2.  Establish a full-time multi-functional data team.
  3.  Develop the detailed project plan.
  4.  Maintain regular action plan updates with the C-level functional leaders.

The FP&A processes are some of the most critical business processes in any company. Whether you decide to start by transforming profit forecasting, cost forecasting, overhead or marketing budgets, it is essential to keep all impacted functional C-level leaders updated on the progress. Also be sure to enlist their help, when roadblocks or obstacles are faced during the challenging and sometimes painful transformation.

Finally, company culture should not be forgotten while implementing the FP&A transformation. There will be many situations where the organisation will try to resort to the previous bad behaviours if there is no regular communication and feedback loop from the organisation to the project team to the C-level sponsors and back again.


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