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Report: Businesses off target on FP&A processes
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Businesses are automating the wrong financial planning and analysis (FP&A) processes, leading to FP&A staff being overextended and burned out, according to a recent report from Gartner.
In fact, only 15% of FP&A leaders reported having a sustainable delivery model in which their teams can maintain a consistent level of decision and planning support while supporting complex, new decisions without burning out.
The survey polled 273 FP&A managers and finance business partners and 102 senior decision-makers at organizations with more than $250 million in revenue from September through October 2023.
“FP&A teams are overextended: always in reactive mode, juggling complex requests that burn out staff, and they are still leaving service gaps because they can’t serve all the decision-makers that need support,” said Randeep Rathindran, distinguished vice president, research, in the Gartner Finance practice. “The typical modernization approach of automating routine FP&A processes to create capacity for in-person decision support is simply not keeping pace with elevated demand in most organizations, and the current trajectory is unsustainable.”
Based on a regression analysis of information provided by the 273 FP&A managers and finance business partners, the less commonly utilized “capability diffusion model” is more than three times more effective than the more common “internal consulting model” in making FP&A delivery sustainable.
The internal consulting model uses automation to free staff capacity so that FP&A teams have more time to spend on value-added activities such as finance business partnering. With the capability diffusion model, technology is the default channel for providing decision support, and in-person business partnering is the exception.
“The key is to think bigger and look at technology as a way to extend FP&A into the wider business rather than as just a way to boost internal capacity,” Rathindran said.
— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.