Here at Apliqo, we’ve had the chance to interact with some incredible companies who have transformed their FP&A capabilities through a combination of powerful software and highly skilled personnel – and we’ve seen a lot of different strategies in terms of building an agile team that can thrive in all the different scenarios that they find themselves in.
Here are some of the commonalities that we see in successful FP&A teams:
Technical excellence
As a foundation, your team needs to have core technical skills that allow them to get the most out of the system that they’re using, while also providing the nuanced understanding required to interpret the results. These skills include:
- Financial modelling. Strong FP&A requires a deep understanding of financial modeling because this forms the core of how data is used and projected forward. Having a good grasp of the principles that underlie global best practices here goes a long way to ensuring proper leverage of FP&A tools.
- Data analytics. Your data is only as useful as your ability to extract key insights and that’s where strong data analytics comes into play. Having the right technical background that guides decisions about what and how to analyse data is critical for ensuring that the insights you’re deriving are relevant, useful, and timely.
- System knowledge. In complex organisations, the collection of software and system tools that make up the entire technology stack can be dispersed and disparate – making it difficult to unify. Someone with in-depth knowledge about how the system works as a whole can be a game changer, even if it’s just to help with troubleshooting when things go wrong.
- Business intelligence. Visualising key data and presenting it to decision-makers is also a key criterion for strong FP&A because this is how things actually get done. This is where business storytelling and persuasion can really help a company understand its current state and move forward in the right direction.
Strategic competencies
Of course, FP&A is not only about the technical side of things because it interacts with so many different teams and departments across an organisation. As a result, the FP&A team needs to demonstrate some key strategic competencies that allow it to have the sort of impact that it needs to. These include:
- Business partnerships. FP&A practitioners need to be able to collaborate effectively with stakeholders across different departments and translate financial and operational insights into strategic recommendations. This skill is often underappreciated, leading to FP&A being underutilised by the organisation as a whole.
- Strategic thinking. It is important that the FP&A team can pick their head up out of the details and understand the wider macroeconomic picture in which the company is operating. This includes awareness of market trends, the competitive landscape, and other aspects of the industry that impact longer-term considerations.
- Decision support. The FP&A team needs to understand the social and operational dynamics that make up a company’s decision-making capabilities. It’s all very well having strong data-driven insights to share, but if they fall on deaf ears because of poor social engineering, then they cannot actually support institutional decision-making.
- Risk assessment. With all projections and forecasts, there needs to be a counterbalancing force of risk assessment that acts as a check and balance. This is critical for ensuring realistic expectation management and for planning for unforeseen negative consequences.
Soft skills
Building on some of the strategic competencies above, FP&A teams also need a number of soft skills that help them navigate corporate politics, cultural nuances, and bureaucracy – while still providing value to the organisation as a whole. Some of these include:
- Adaptability. There needs to be a willingness to embrace change and adjust to a fast-changing business landscape. Even when priorities shift, FP&A teams need to manage their workload and allocate their resources effectively without falling into sunk cost bias.
- Communication. This is true for everyone, but especially in the field of FP&A. Strong verbal and written skills are needed to explain financial concepts to a wide range of audiences in a way that enables them to make the right decision.
- Problem-solving. FP&A teams need to consistently seek creative approaches to challenges, especially as they are often working with ambiguous or incomplete information.
- Continuous learning. Teams that regularly upskill themselves and keep up with the cutting edge of the FP&A field will find themselves well-placed to compete and deliver across a variety of contexts. This includes training in new technologies, adapting new tools, and evaluating new financial methodologies.
Mindset
Lastly, an FP&A team needs to adopt a common mindset that serves as the foundation for all that they do. This is something that needs to be baked into the culture and rewarded by senior leaders and managers. The key pillars of such a mindset are as follows:
- Digital first. FP&A teams should be pre-disposed to embrace automation and digital transformation whenever there is an opportunity to benefit from it. By aggressively eliminating manual work that could be better done by a computer, the team frees up more time and resources to focus on value-adding analysis.
- Proactive. What sets FP&A apart from traditional reporting is that it focuses a lot of effort on forward-looking analysis and predictive modeling, as opposed to historical reporting. This requires a proactive mindset that is constantly looking forward and trying to adapt to the potential futures that lie in store.
- Agile. Where possible, FP&A teams should embrace a version of the agile production model that implements sprint-based planning and careful scope management to ensure consistent forward progress that doesn’t cause burnout to individual contributors.
- Innovative. The sky is the limit when it comes to FP&A and so any attempts to innovate should be celebrated. Encouraging new ideas and approaches to traditional FP&A processes can transform a company when done consistently – because it allows for unique ideas to blossom.