The FP&A team of the future

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The FP&A team is too often seen as an overhead, but we know that there is significant potential for value creation hiding in plain sight. How significant? There could be a trillion dollars of value just waiting to be unlocked by the FP&A team of the future.

Is this really achievable? The sums add up. The support that FP&A provides as a business partner enables effective decision-making for business success. If that support helps the organization to add just 1% to the bottom line, and every finance professional strives to make the same modest positive impact, how much can FP&A generate on a global scale?

The 2022 Fortune Global 500 companies reported profits between them of $1.84 trillion. These companies represent just two-thirds of the GDP of the United States. The aggregated contribution of the millions of smaller successful and profitable businesses worldwide in Europe, Asia, or Africa will exceed this multiple times. Even a conservative estimate takes global profitability into twenty trillion, thirty trillion, or more.

Now add a value-creating FP&A professional in every business who enables a modest 1% uplift to the bottom line each year. In the space of five years or less, FP&A can generate a trillion dollars.

Unleashing the power of FP&A

Can your current FP&A team deliver this change? They can, but there’s work to do. Historically FP&A has been focused on analyzing and reporting on data. This is all well and good, but it delegates the value creation to others and risks losing some of the key insights in translation.

Moving the influence of FP&A upstream in the decision-making process unleashes new insights and support for nuanced strategic thinking at the highest level. After all, finance holds a unique position in the company as every consequence of decision-making flows through the books. We have a bird's eye view of the whole operation and a deep understanding of how the jigsaw fits together.

The challenge is to refocus our analysis on the numbers that matter, giving meaning to the K(ey) in KPIs and drawing them out into the light from our standard analysis and reporting. Follow the money to sniff out the decision threads that make a difference to the business. Read between the lines to work out what story the data is telling. By developing KPIs that influence decision-making behavior and improve the bottom line, we contribute directly to value creation and success.

Drive the right strategic choices

The primary task of the FP&A team of the future becomes driving the right strategic choices. With that end goal in mind, repurposing your FP&A team from data and reporting to insights and influence becomes more straightforward. In the same way that a business operates more effectively when the goals are clear, the FP&A team can harness its considerable skill to achieve this end.

Data has always informed decision-making, but FP&A adds value by highlighting the key insights to enable rapid and effective responses to business challenges. Reporting has always been an integral part of FP&A, but good communication makes this an asset rather than a passive activity and builds relationships and influence throughout the organization.

The FP&A team of the future is here, ready to take the next steps as value creators and business partners, poised to realize a trillion-dollar opportunity. In our next blog, we’ll look at the key roles involved. What has your experience been of changing the focus of your FP&A team? Let us know in the comments.

This was the first article in my new series "Building the FP&A team of the future". While you await future articles you can read my previous series "The ten commandments of planning and forecasting" below.

The ten commandments of planning and forecasting

Why planning should always be aligned with strategy

Why documenting your assumptions is the most important part of planning

Without an effective feedback loop, your strategy and plan will fail

Why you should blow up your budget process

Accuracy should never be the goal of forecasting

The planning department is not the whole company - but the whole company better be planning

A simple plan is the best way to achieve your target

Re-forecasting your financials should never take more than a week

Never plan without multiple scenarios

Great planners always plan with contingencies

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum, which is part of the Business Partnering Institute's online community.

Can't help falling in love FP&A (the last article in my series about charting the course for a successful FP&A career)

Can we trust the machine for financial planning and analysis? (the last article in my series "Planning (as we know it) is dead")

The secret sauce of FP&A transformation (the last article in the series "FP&A Transformation Talks")

How Finance should use its seat at the table (the last article in the series "The Unfair Advantage of Finance")

The ultimate guide to decision-making for finance professionals (the last article in a series about the decision-making process and how Finance should impact it)

The Mindset Change Checklist For Finance Professionals (the last article in a series about the mindset change that finance and accounting professionals should make to become business partners)

It's Time To Decide If You Want To Be A Business Partner (the last article in a series about the personality traits of business partners)

All Successful Business Partners Are "Leaders" (the last article in the series about our new capability model)

Should We Keep Talking About Business Partnering? (part of a 17-article series where we deep-dive into the WHY, WHAT, and HOW of business partnering by putting it on a formula)

Your Journey To Successful Business Partnering Explained

How To Create Value Through Business Partnering

Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)

From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)

Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)

How Business Partners Turn Analysis To Insight (part of a case study series where I interview business partners about how they drive value creation using real cases)

The Future Of FP&A: Two Ways To Take The Reins

What Is The Accounting Profession Paradox?

What Defines A Finance Master?

The New Career Path For Finance Professionals

How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

Financial Analyst vs. Finance Business Partner

Finance Business Partner Is A Bullshit Job

How Business Partners Keep A Plan On Track

Anders Liu-Lindberg is the co-founder and a partner at Business Partnering Institute and the owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 115,000+ followers and 195,000+ subscribers to my blog. I am also an advisory board member at Born Capital where I help identify and grow the next big thing in #CFOTech. Finally, I'm a member of the board of directors at PACE - Profitability Analytics Center of Excellence where I support the development of new analytics frameworks that can improve profitability in companies around the world.