Capabilities overtake capacity as top financial planning challenge, CFO poll shows

Filling capability gaps takes more than just throwing more bodies at the work. FP&A leaders also need to build agile processes and flexible forecasting systems. For instance, they should consider enhancing their planning and analytics tools to improve forecasting professionals’ effectiveness. Also, streamlining and connecting disparate planning processes can enable planning parameter changes to systematically flow through the organization.

Strengthening capabilities in this way can enable FP&A to play both offense—helping the business capitalize on opportunities—and defense—dampening the negative impacts of worst-case-scenario swings. For offense, FP&A can employ robust scenario planning to clearly articulate choices and triggers for decisions, taking emotion out of the equation. They should identify what levers within the company’s control it can pull, eliminate silos and involve business partners early to accelerate decision-making, implement operational planning models and technologies that allows each group to make fast and accurate updates, and define triggers and KPIs that signal when to mobilize on a particular scenario. Defensively, FP&A could refrain from entering into inflexible contracts (for example, by using shorter-term agreements that can be easily renewed), reengineer processes with long lead times, and create flexibility within the organization to address upswings or downswings in demand.