Striking the balance: key skills in a successful FP&A team

When you are a CFO, a well-functioning FPA (Financial Planning & Analysis) team is right at the foundation of your Maslow pyramid of needs. This team is the source of information and insights. Ultimately you make business decisions based on what they produce. So it matters.

You can have an FP&A team that can deliver financial forecast on time and accurately. ?Bad news. It is not enough. What CFOs really need is a modern, lean and efficient team that is ultimately both SERVING and INFLENCING the business (not just a CFO).

In my opinion, there is no ultimate, one-size-fits-all solution when it comes to the structure of the FP&A team. Size of your company, your industry, your unique business needs – all these factors will play a role. It is easy to focus on finding the right structure and then filling it with “heads”. It is harder to combine it? with the right balance of skills and expertise for the structure to function well.

I tried to reflect on what this balance of skills and expertise looks like for a well-functioning FP&A team and for me it boils down to 4 types of profiles:

1) SYSTEMS EXPERTS. They can go by many different fancy names these days, but ultimately, they are the people who can find their way around systems, can design optimized data flows and, importantly, can root-cause and trouble-shoot issues. With the technology advancements you should expect them to be skilled at predictive technologies, AI and ML.

Whatever your level of automation is, you need them. You can borrow them internally or hire externally, either way it is important that they have experience of working with finance function, can understand finance language and translate inputs form the business into efficient system design solution.

You need these people permanently. For putting a new process in place and crucially implementing any improvement processes at a later stage.

If they are good, invest in retaining them as they will be sought after externally. And lastly, don’t confuse having experts with general upskilling of your F&A team in technology and digital. Having real experts is tough to substitute.

?

2) PROCESS DESIGN EXPERTS. These are the people who combine two things. They have an excellent understanding of the organization structure and business needs AND they know the systems and data flows well-enough to work with system expert. Their objective is to optimally design the process so that it utilizes resources efficiently and delivers on business needs.

They are not to be confused with systems experts. Their work focuses on people and processes. And it is like putting jigsaw puzzle together make sure each little part finds its place. Defining clear roles & responsibilities, creating integrated process calendar, avoiding overlaps and re-work, eliminating silos, putting necessary incentives in place, training the organization… The list can continue.

Ultimately, they are operationalizing a system process flow within organization that has its specific cultures and certain functional behaviors & habits. With the best systems, human part of making FP&A work at high standard is the most difficult.

?

3)?PROCESS EXECUTION EXPERTS. These are meticulous individuals with high discipline and attention to detail. They are great at understanding the process and executing brilliantly. They are the operational backbone of FP&A team, “the engine room”, they make things happen.

Often, centralizing this group can be a great idea. They can handle the consolidation of financial forecasts from various business units, automate and run central analytical services, and manage reporting dashboards used by the organization. Putting these tasks in their hands ensures consistent quality and standard. Much harder to do via de-centralized team of Finance analysts.

Process execution experts are also a “treasure trove” of ideas to optimize the process. For a simple reason, they c keep the gears of the FP&A engine turning month after month.

?

4) INFLUENCERS. These people are your frontline to the business, usually embedded within business teams. ?Their core strengths should be analytical thinking, strategic foresight, and superior communication skills. They are there not to just present a monthly forecast and help run the process. They are there to lead business updates (using forecast numbers), consider potential risks, analyse different business scenarios. Effectively, they story-tell through the numbers to set the scene for decision making.

For bigger companies with multiple layers of reporting and business reviews these roles become even more pivotal. They play the role of portfolio and risk analysts, ultimately guiding the leadership team through various layers of data, highlighting the most critical insights for impactful decision-making.

No single member of your FP&A team will be 100% one of these profiles. In fact, they should have knowledge across all 4 areas but expertise in 1 or maybe 2. ?Once you take the first step to assess the skills and knowledge of your current team, you might find out complete skill gaps and people in the wrong roles. It is easy to put all the focus on “influencers” as they are business-facing. But you need the right systems, the right process design and “the engine room” running. Otherwise, there is no story to tell.

?

So, for CFOs and Finance leaders, who look to build build or revamp their FP&A teams, the focus should be on the versatility of profiles that they can put in the right roles and deep alignment with overall business need and objectives. You want to create a Steering function, not a Supporting one.