Category Archives: Excel Hell

Putting the A Back in FP&A with Automated, Integrated Planning

I was reading this blog post on Continuous Planning by Rob Kugel of Ventana Research the other day and it reminded me of one of my (and Rob’s) favorite sayings:

We need to put the A back in FP&A

This means that the financial planning and analysis (FP&A) team at many companies is so busy doing other things that it doesn’t have time to focus on what it does best and where it can add the most value:  analysis.

This begs the question:  where did the A go?  What are the other things that are taking up so much time?  The answer:  data prep and spreadsheet jockeying.  These functions suck time away and the soul from the FP&A function.

dataprep

Data-related tasks — such as finding, integrating, and preparing data — take up more than 2/3rds of FP&A’s time.  Put differently, FP&A spends twice as much time getting ready to analyze data than it does analyzing it.  It might even be worse, depending on whether periodic and ad hoc reporting is included in data-related task or further carved out of the 28% of time remaining for analytics, as I suspect it is.

spreadsheetsrule

It’s not just finance who loves spreadsheets.  The business does do:  salesops, marketingops, supply chain planners, professional services ops, and customer support all love spreadsheets, too.  When I worked at Salesforce, we had one of the most sophisticated sales strategy and planning teams I’ve ever seen.  Their tool of choice?  Excel.

This comes back to haunt finance in three ways:

  • Warring models, for example, when the salesops new bookings model doesn’t foot to the finance one because they make different ramping and turnover assumptions.  These waste time with potential endless fights.
  • Non-integrated models.  Say sales and finance finally agree on a bookings target and to hire 5 more salespeople to support it.  Now we need to call marketing to update their leadgen model to ensure there’s enough budget to support them, customer service to ensure we’re staffed to handle the incremental customers they sign, professional services to ensure we’re have adequate consulting resources, and on and on.  Forget any of these steps and you’ll start the year out of balance, with unattainable targets somewhere.
  • Excel inundation.   FP&A develops battle fatigue dealing with and integrating some many different versions of so many spreadsheets, often late and night and under deadline pressure.  Mistakes gets made.

So how can prevent FP&A from being run over by these forces?  The answer is to automate, automate, and integrate.

  • Automate data integration and preparation.  Let’s free up time by use software that lets you “set and forget” data refreshes.  You should be able to setup a connector to a data source one, and then have it automatically run at periodic intervals going forward.  No more mailing spreadsheets around.
  • Automate periodic FP&A tasks.  Use software where you can invest in building the perfect monthly board pack, monthly management reports, quarterly ops review decks, and quarterly board reports once, and then automatically refresh it every period through these templates.  This not only free up time and reduces drudgery; it eliminates plenty of mistakes as well.
  • Integrate planning across the organization.  Move to a cloud-based enterprise performance platform (like Host Analytics) that not only accomplishes the prior two goals, but also offers a modeling platform that can be used across the organization to put finance, salesops, marketingops, professional services, supply chain, HR, and everyone else across the organization on a common footing.

Since the obligatory groundwork in FP&A is always heavy, you’re not going to succeed in putting the A back in FP&A simply by working harder and later.  The only way to put the A back in FP&A is to create time.  And you can do that with two doses of automation and one of integration.