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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.
The Future of FP&A: Digital Transformation
CFOs and senior management need accurate forecasting from their FP&A team to make reliable data-driven decisions. As we enter into a new era of finance transformation with organizations looking to integrate, manage and analyze their enterprise data, the FP&A job description will take on a strategic, digital-first approach.
FP&A professionals are moving away from planning and forecasting in Excel spreadsheets, which are too often created in an ad hoc manner and siloed across business units. A digital-first approach to planning means organizations are adopting strategies that are focused on process automation, agility, transparency and data-driven decisions.
FP&A teams are now adopting solutions that allows them to alter plans, reforecast or modify budgets in real time and integrate planning across business units to speed up decision making, therefore improving the accuracy and reliability of plans and forecasts. A reliable financial model is needed to create a solid business strategy. This requires solutions designed specifically for planning, forecasting, and financial reporting that enhance operational efficiency and generate insights. Selecting the solution is an important decision that may involve the chief financial officer, FP&A manager and other corporate stakeholders.
L'Oreal is streamlining their planning and analytics practices with IBM solutions. Learn how they are transforming FP&A.
Modern FP&A solutions drive business results
91% can track actual performance vs budget
50% improvement in time to complete a forecast
1.58x more likely to execute what-if analysis
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Discover how IBM Planning Analytics with Watson can be used to create and track a financial plan for a large enterprise with multiple divisions, by allowing finance teams to access real-time data across the organization.
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Ancestry models 51 quintillion data points
“We needed an application that can spit out the numbers immediately. The old application was taking hours for us to do the calculations and for people to be able to look at the numbers and make decisions.”
— Jose Balitactac, FP&A Application Manager for Ancestry.com