What is xP&A and How it Can Guide You Through Uncertainty?

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For many organisations, individual divisions are often assigned their own plans, targets, and systems that are typically created in isolation of one another. A siloed approach to the performance data of HR, Production, and Sales teams can fail to provide real insight into the impact they’re having on the business overall.  

The COVID-19 pandemic has affected several areas of business, including significant changes to supply chains, workforce, sales, and operations. Disruptions have highlighted the importance of having systems that provide real-time feedback across the whole organisation. Modern businesses need to be agile, adaptable, and resilient. 

Trying to manually collate data from disparate systems to align individual division goals and performance to overall business strategy is near impossible–leaving business leaders without clarity over the relationship between their division’s output and the “bigger picture” of their organisation. 

One of the primary challenges financial planning and analysis (FP&A) teams face is data collection: 

  • No access to source systems.  
  • Inputs from disparate departmental systems. 
  • Differences in taxonomy and timing creates inaccuracies. 
  • Time consuming given the ever-evolving nature of business activities and industry. 
  • Massive Microsoft Excel spreadsheets, which are error-prone, often slow to process data, and limit collaboration. 
“By 2024, 70% of new financial planning and analysis projects will become extended planning and analysis (xP&A) projects, extending their scope beyond the finance domain into other areas of enterprise planning and analysis.”  
2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions, Gartner 

What is xP&A? 

Automated processing and corporate performance management (CPM) tools enable FP&A best practices to be extended across the entire organisation—combining FP&A with operational financial planning and budgeting. 

xP&A consolidates forecasts and performance metrics from across the entire organisation. By integrating information from various departments into a holistic view of the organisation, business leaders can forecast, monitor, and evaluate their proposed solutions against the business as a whole—not just their own divisions.  

Benefits of Adopting an xP&A Approach 

1. xP&A promotes agility 

xP&A takes a proactive approach to planning by establishing an integrated view of your business as a baseline for all decision-making. When issues arise, leaders are positioned to immediately assess the situation, evaluate options, and move forward with their chosen solution. 

2. xP&A Provides a Single Source of Truth and Allows Easier Identification of Opportunities 

Information from multiple systems often causes conflicting information, forcing leaders to spend time trying to make sense of their data instead of focusing their attention on value creation. 

xP&A software increases accuracy and eliminates the cumbersome process of consolidating data, creating a single source of truth that all business leaders work from. 

This  unified, accurate data makes it easier to identify growth opportunities. 

3. xP&A Creates Performance Transparency 

Removing data silos creates a single view of financial and operational activity. xP&A provides leaders with the tools they need to quickly identify improvements in efficiency and output, enabling them to act as strategic advisors for the Executive Leadership Team and empowering them to become true business partners. 

4. xP&A Enables Collaboration and Increases Accountability 

xP&A allows strategic goals to be cascaded down into operational activities, which aligns department heads around KPIs that support organisational goals, rather than focusing on individual departmental incentives. 

Accountability becomes clearer when department heads have visibility into organisational KPIs and can understand how they directly impact those metrics. 

5. xP&A Enables Scale 

With higher volumes of data, from increasingly diverse sources, many organisations struggle to take advantage of insights that their data can provide. An xP&A tool can translate business value from large datasets.

By 2024, 50% of new financial planning and analysis implementations, upgrades and replacements will be sourced from core financials vendors, due to superior integration and product bundling.”
2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions, Gartner

To realise xP&A effectively, organisations need a unified platform, like CALUMO, which offers the flexibility to adapt to the unique needs of different users, while preserving data accuracy. 

To speak to one of our specialised consultants, contact CALUMO on +61 2 8985 7777 (Aus) or info@calumo.com.