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From back-office function to strategic partner
It’ s fair to say that in many businesses FP & A is overtaking the supply chain to become the preeminent business function. It’ s a remarkable turnaround, bringing with it a new breed of commercially minded financial professionals focused on helping the business grow and achieve its strategic ambitions.
This rise of FP & A functions is good news for supply chain professionals as it is empowering them with all sorts of data and analyses that previously finance functions were either unable, or simply unwilling, to provide.
For example, most businesses of any size have a five-year growth strategy, and they are usually supported by a financial plan that states what the P & L looks like across that five-year window. Often missing from this is the‘ How, When, and by Who’ will those longer-term strategic plans be delivered, and they also often miss the‘ affordability’ of the required investments. This typically leads to the missed delivery of the longer-term objectives, and instead businesses enter a cycle of resetting strategy every year – and never achieving their ambitions.
FP & A teams are helping to resolve some of this gap by creating more detailed bottom-up business plans across the five-year horizon, articulating which product families, innovation, geographies, supply chain, and operational improvements, are expected to hit these strategic priorities, as well as timephasing the benefit case.
This bottom-up financially viable build over the five-year horizon really helps to give far more credibility to the plans and also ensures there is appropriate ownership and accountability within the organization to actually deliver.
New opportunities
FP & A, by using integrated planning techniques like S & OP and Integrated Business Planning( IBP), is also able to assess the current trajectory and latest status of the initiatives, working with supply chain and other leaders in the business to identify any deviation to those plans or projects. They are also much more closely involved with creating options to help bridge any gap that arises, and with exploiting opportunities to get ahead of the curve where appropriate.
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