Finance teams: from advisers to storytellers

Since the onset of the pandemic, businesses have been forced to not only restructure where and how they work, but also how they prepare for the future. 

As a result, financial planning and analysis (FP&A) teams have seen an upsurge in demand for scenario planning and strategic services, which has shifted their attention from “number-crunching” roles to tasks that create greater value for management.

To support them in this venture, FP&A teams are turning to enterprise resource planning (ERP) and FP&A solutions, which make budgeting, planning, forecasting, reporting and analysis simpler and more effective, says Michael Lengenfelder, vice president of application design FP&A at Unit4, a software company that designs and delivers cloud-based enterprise solutions. 

Over the past 18 months, Lengenfelder has seen pressure placed on FP&A teams to produce integrated financial plans and high-level simulations with greater frequency and complexity.

He explains that “this makes the use of an FP&A system almost mandatory, compared to the old days when you could afford the inefficiency of doing something in Excel”.

Evolving expectations

Technology solutions that automate administrative tasks enable FP&A teams to allocate their time more productively – drawing on artificial intelligence (AI) and predictive analytics tools, for example, to identify trends, foresee challenges and direct their business’s decision-making accordingly.

Such capabilities have never been more critical. According to a recent survey conducted by the Business Application Research Center (BARC), 89 per cent of companies no longer believe it’s possible to predict global events and future developments with sufficient reliability, while 80 per cent agree that it will be more important to rely on quick forecasts instead of elaborate budgeting in the future.

In this dynamic environment, Lengenfelder agrees that an annual forecast is no longer sufficient, when real-time information is needed to guide business decisions. 

“With things changing so quickly, I think more and more organisations will start adopting the rolling forecast, or constant forecasting,” he says. 

“If you have new learnings, you go into the system and enter your changed data and new perspectives, so you have a finger on the pulse at all times.” 

Turning numbers into narratives

Lengenfelder believes with the right tools, FP&A teams will be well-equipped to “steer by numbers”, explaining: “You have everything set up so you can quickly generate a budget, a plan, a forecast; you have good connection to your source systems so that you can, without any manual effort, immediately report on budget forecast deviations with your actuals.” 

Teams can then collate feedback from users to explore where the business has and hasn’t performed, and identify actions that should be taken to resolve issues or recreate success. 

To convey more than numbers alone, Lengenfelder believes finance team members must become skilled storytellers, or “FP&A journalists”. 

“If you have your automatic standardised reporting already in the system, you can start the investigation – asking questions and digging around to build a story,” he says. 

Rather than having to “self-service” the data, C-suite executives should then be able to review a high-level summary of the findings, along with recommended actions, in an “easy-to-consume, well-prepared and integrated finance report”.

By sharing data-driven stories that enable leaders to make better and faster decisions, FP&A teams stand to become trusted business advisers who organisations can turn to for direction through even the most turbulent and uncertain times.

Download Unit4’s whitepaper from FP&A Trends on FP&A Storytelling