At the AFP 2018 FP&A roundtable, attendees engaged in a common topic with a counter-intuitive twist: How can you build a business case for making an investment in technology to convince management to spend the money? The most compelling arguments were as follows:
Align with your data strategy. One VP of FP&A succinctly stated, “You have a roadmap for your company’s digital strategy; the Finance organization should be on it.” A digital roadmap is a vision and a plan of how to translate strategy into operations. If the company want digital in the DNA, you can leave out one entire department because it will hold you back elsewhere. It will limit their interaction and information sharing, downgrade the investments and efforts across the enterprise, create multiple platforms for IT to manage, and introduce management challenges to your overall strategy. Failing to upgrade your finance department undermines your own appointed strategy.
Provide better service. Address management’s need to know, “What’s in it for me?” Better service, faster turnaround time for data requests, new functionality, independent control. If management is content with what the are getting on legacy systems because it has always worked, then perhaps they have a limited view of what FP&A can deliver to them. They may be content with the production of management reports and variances without knowing that deeper insights are available from their team. Your business case may need to enlighten them.
Realize personnel benefits. “I have people pulling all-nighters come budget season, but all management knows is that they get their reports,” said one large bank executive. Some aspects of the personnel benefits can be hard to quantify: demoralized current staff, hiring sub-optimal employees because no one wants to take a job in “Excel hell,” or positions remaining open longer than expected. The whole organization suffers from people grinding out slow budget processes.
Conduct a cost benefit analysis. Last, and perhaps least, the roundtable group spent the least time talking about the most obvious approach: the net cost. Why? For one, it has been tried and often shot down before. In addition, when making a pitch for new software based on cost savings, attendees found it was accompanied by the question, “How many people will you cut?”
The first three items are strategic benefits to a business case for upgrading your FP&A function to derive more value the entire organization. They focus create a multiplier effect, where the benefits to an efficient and engaged FP&A team reside in finance as well as the business and executive functions they support. In contrast, focusing solely on the cost-benefit analysis represents a retro-active view of FP&A that treats budgets and forecasts like counting beans, a consolidation process to be done.