FP&A is getting a major makeover. Rather than just pumping out quarterly reports and other finance formalities, CFOs and finance professionals are expected to take on far more strategic roles at their organisations.
To prepare for this already ongoing fundamental change and fulfil these exciting new roles, CFOs and their finance teams need to look at technology, improved forecasting and planning strategies, and the right talent.
In our blog, we’ve talked to a great extent about how to use tech and finance best practices to improve your FP&A processes. In this article, however, we’re going to look at talent and show you why people are just as important in transforming the role of finance at your company.
Why talent counts in financial planning and analytics
“The financial crisis has highlighted the mounting challenges of managing finance within an increasingly complex and globalised market,” says Apliqo CEO Daniele Tedesco. In todays’ rocky business environment, he believes talent plays a crucial role in helping finance departments grow into their new roles.
“Ensuring that finance functions have the right people with the right skills, organisation, motivation, and empowerment will be crucial in managing the uncertain times ahead,” Daniele says.
Today, financial professionals are expected to take on responsibilities that may not have always landed on their desks. As company stakeholders rely more heavily on FP&A to guide their decision making, CFOs and their teams find themselves taking on a complex mix of tasks, including;
- Financial analysis,
- Asset valuation,
- Budgeting and forecasting,
- Management reporting,
- Widespread company support and collaboration, and
- Strategic reporting and analysis with senior management.
In our recent article on FP&A digitalisation, we took an in-depth look at the critical role technology plays in helping finance professionals juggle these new responsibilities. But without the right people and the right skill sets, digital solutions will only get you so far.
“As the need for more in-depth and thorough analysis has increased, finance departments have in turn developed a need for talented people with skill sets that exceed the solid finance and accounting knowledge that we traditionally look for,” says Daniele.
In order to drive strategic value for their organisations, finance professionals now need to count with a profound understanding of their company’s industry, strong tech and system skills, data science capacities, and solid communication. Check out Daniele’s article on the importance of communication in FP&A here.
Having a clear understanding of a company/organisation, its industry, and its strategic outlook is especially important. According to The Hackett Group’s 2018 Key Issues Study, 73% of executive managers agreed that hiring individuals with a strong understanding of their company’s key drivers (units and functions) is key in improving finance’s analytical, modelling and reporting capabilities.
According to Daniele, other attributes he considers crucial for today’s finance professionals include:
- The ability to distil complex data into usable information.
- A solid understanding of the company’s priorities and strategic goals.
- A strong vision of technology and how to leverage it to drive value for the company.
- Strategic and critical thinking, as opposed to the traditional “accounting mindset.”
- Strong presentation skills.
- Solid technical accounting and finance skills.
- A collaborative attitude and drive to take on a strategic role at the organisation.
How can CFOs improve the talent of their finance team?
“CFOs that can’t build a strong FP&A team capable of delivering on current challenges won’t be able to become the business partner their company needs them to be, and it will likely have an adverse effect on their business’ performance,” says Daniele.
That begs the question – how can you create an FP&A team with the talent to properly guide your company’s key stakeholders in their decision-making? Some strategies include:
- Increasing your team’s capacity. Ensuring your team has enough time and resources to transition out of its traditional, accounting-focused role is crucial and should be one of your top priorities. It is time to invest into FP&A teams!
- Changing company finance culture. In order to secure the time and resources your team needs to grow into its new role, you’ll need to play an active part in helping the rest of your company understand the value of FP&A. This includes ditching the accounting mindset (which we’ve covered in previous articles), not just among your team members but among people outside of your department as well. Make sure your co-workers and company key stakeholders understand the ability of FP&A to drive value for the entire organisation.
- Implementing the right tools and technologies. Adopting FP&A best practices and new systems that force your team to step out of Excel will not only help you free up time to focus on more value-driving activities but will also provide an opportunity to support the development of your team members.
- Creating experience. Providing your team with opportunities for growth is a key part of your role as CFO. This may include competency-based training, coaching, and mentoring, as well as looking into hands-on in-house activities to encourage the professional development of your team members.
- Clearly managing expectations. As a finance leader, it is your responsibility to ensure each and every one of your team members understands the role of finance at your company and how this impacts their role in your team. This ties in with deconstructing the accounting mindset, as well as changing the perception of finance’s role at your company.
Keep in mind that, as CFO, you’re not exempt from growing, either. Modern CFOs need to be strong strategists, extremely solid communicators/presenters, and boast a sound understanding of their business, their industry, and their company’s key drivers.
Remember, the role of finance is changing. As CFO, it’s your responsibility to prepare yourself and your team to take on more value-driving positions at your company. For more tips and insight into how to stop crunching numbers and start driving real value for your business, bookmark our blog and check out our archived webinars here.