Ten Challenges Facing FP&A In 2021

This article is written in collaboration with ValQ, winner of the innovation award at the Financial Modeling Summit 2020. You can learn more about ValQ and schedule a product demo here. 

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The CFO has named FP&A a top priority for transformation. She simply wants a higher ROI from FP&A considering the significant technology investments made in the department in the past decade. The demand is clear but how to make it happen less so. FP&A is not short of challenges, but few are showing a path to solving them. That is all changing now! 

Together with ValQ, I have outlined ten challenges facing FP&A that must be solved to deliver on the CFOs demand. Over the coming months, we will show you how these challenges can be solved. We also welcome you to share your views on the challenges or highlight if you feel there are different challenges to solve. 

ValQ recently won the innovation award at the Financial Modeling Summit 2020. I have recently published the eBook “Unlocking the Future of FP&A”. Together we have formed a coalition that will move FP&A forward in the next decade. 

The challenges we will outline do not cover everything that needs to be solved in FP&A. They do, however, cover a wide space within planning & budgeting, agility, collaboration, simulations, visualization stakeholder centricity, planning systems, and more. We will show you practical tips and tools to help you on your journey. We believe by the end of the year you will be much better equipped to satisfy your CFO. Shall we get started? 

The ten challenges 

FP&A can improve in all areas of its domain. We must devote ourselves to a continuous evolution of how we work and constantly improve our outputs. Solving these ten challenges will give you a push in the right direction. 

1. Planning and budgeting take too much time (and resources)
2. We spend too much time on small details that add little value
3. We are not agile in our response to market and business changes
4. We do not collaborate effectively (neither online nor offline)
5. We lack mature “what-if” and scenario planning capabilities
6. FP&A processes and outputs are designed for Finance not for the business
7. Planning systems are expensive and only affordable by large companies
8. We are stuck in the same old budgeting and planning dogmas
9. Visualization of data must be democratized and have its “iPhone moment”
10. We are limited in our ability to do quick re-forecasting for custom periods 

The list of challenges could easily be extended but already feels overwhelming to most. That is why we will cut it at ten and then structurally deep dive into how we solve them in the coming months. We will evolve on the topics through articles, posts on LinkedIn and webinars. 

Practical and simple solutions 

Too often in transformations, we go overboard in projects, structures, and ways to solve the different challenges. However, that rarely works, and we will apply another approach where we share practical and simple solutions that you can apply right away. 

This will help you make your CFO happy but perhaps more importantly also your business stakeholders. After all they are the ones accountable for delivering improved business results by setting the right strategic direction for the company. In solving the challenges, we must never forget the purpose of FP&A i.e. “to set the right strategic direction for the company”. 

FP&A cannot succeed in a vacuum but depend on enabling others to succeed. In the past, our ways of working and transforming FP&A have been too introspective. It is time that we involve our stakeholders significantly more in coming up with the right answers and solutions to these challenges. 

Watch out for new weekly content addressing each of the topics. We want to involve you in the solution as well and hope that you will share your views on the challenges and solutions in the comments. If you have any good cases to share or stories to tell, please do not hesitate to reach out. Successfully solving these challenges is critical to the future of FP&A! Are you ready to get to work and solve the challenges?

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum which is part of Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on Twitter.

8 Changes For FP&A To Make To Transform Strategy (part of a ten-articles series about FP&As involvement in the strategy process)

An Open Letter To The CFO: Are You Ready To Transform FP&A?

The Future of FP&A – Two Ways To Take the Reins

How To Create Value Through Business Partnering

Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)

From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)

Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)

How Business Partners Turn Analysis To Insight (part of case study series where I interview business partners about how they drive value creation using real cases)

What Defines A Finance Master?

The New Career Path For Finance Professionals

How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

Financial Analyst vs. Finance Business Partner

You’re A Finance Business Partner, Now What?

Building A Team Of Finance Business Partners

Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 8,500 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 45.000+ followers.?