Introduction

What is FP&A?

Financial planning and analysis (FP&A) is a set of activities including planning, budgeting and forecasting that support financial management and improve decision-making. Organizations rely on FP&A to achieve operational, financial and strategic goals.

Financial analysts develop forecasts designed to reflect how the business will perform. Source data includes cash flow, Microsoft Excel spreadsheets, business trends, variance analysis, historical data and scenario modeling. With this financial data, analysts can assess how the budget and forecast compare against actual financial performance and how to best approach efficiency goals and fiscal strategies.

CFOs and senior management need accurate forecasting from their FP&A team to make reliable data-driven decisions. To increase accuracy, FP&A professionals are moving away from planning and forecasting in spreadsheets, which are too often created in an ad hoc manner and siloed across business units.  

A reliable financial model is needed to create a solid business strategy. This requires solutions designed specifically for planning, forecasting, and financial reporting. Selecting the solution is an important decision that may involve the chief financial officer, FP&A manager and other corporate stakeholders.

Discover IBM Planning Analytics

Planning Analytics puts the power of algorithmic forecasting in the hands of FP&A analysts. Learn how to execute more reliable planning, budgeting, and forecasting with your corporate FP&A team.

Practical applications of FP&A

Efficient FP&A processes help organizations align to realize strategic goals

Planning, budgeting and forecasting

Create driver-based plans, budgets and forecasts, based on input from the front lines of the business. Align top-down financial targets with bottom-up plans, then link plans together via your FP&A function for a cohesive view of all departments and geographies.

Strategic planning

Ensure that corporate strategic plans and performance management systems align resources with business opportunities. Monitor your progress toward strategic goals with executive dashboards and strategy maps.

Operational planning

Facilitate operational planning processes that help senior management pinpoint opportunities to achieve cost savings and operational efficiencies. Cut costs and improve productivity using deep insights to understand business drivers.

Capital planning

Automate and integrate the capital planning process. Project owners can justify major capital projects and forecast project expenditures more easily, while management can ensure that ROI measures are consistent across the organization.

Workforce planning

Acquire and retain the right talent at the right time with powerful planning, budgeting, and forecasting tools that help drive efficiency. Automate workforce planning for faster and more accurate results. Collaborate on plans across HR, corporate finance and business operations, integrating data from HCM & ERP/GL systems into one central repository.

Profitability analysis

Perform complex cost allocations and financial modeling for profitability analysis. Drill down for a granular view of profitability by product, customer, region, sales channel and more.

What to look for in an FP&A tool

Great FP&A solutions meet these requirements

Dynamic

Rapidly change models based on input and prototypes.

Fast

Full central database access. Data is current, rollups are faster.

Integrated

Planning, analysis, workflow and reporting on one platform.

Collaborative

Web-based, distributed planning for participation anytime, anywhere.

Led by finance

Finance teams know best what is required for software flexibility and ease of use.

Efficient

Spend less time managing data and more time managing the business.

Flexible

Keep your current processes in place with a solution that scales to meet your needs.

Reliable

Fewer errors due to broken links, stale data, improper rollups and missing info.

Accessible

Integration with the familiar Microsoft Excel interface helps improve adoption and results.

FP&A at work

L’Oréal streamlines FP&A with IBM solutions

“We used Planning Analytics and Cognos Analytics to build a unique system for finance purposes, which addresses simulation and reporting for day-to-day processes.” — Laurent Mesnier, L’Oréal

Model your enterprise profitability

View a sample dashboard that showcases how you can plan, analyze and explore data across departments to help understand the opportunities for improving profitability.

Make your FP&A smarter

Energy company Nukissiorfiit used machine learning and analytics to automate, accelerate and share intelligent forecasts to drive more informed decision-making.

Resources

IBV report: Finance as the essential trusted business partner

Read how CFOs accelerate digitizing the workplace

Are you ready to emerge with resiliency?

Find out how your planning solution stacks up

Report: How finance teams are using analytics today

Discover areas for improvement and 10 best practice recommendations

IBM Planning Analytics

Automate and accelerate planning, budgeting and forecasting processes with IBM Planning Analytics.