3 Powerful Reasons Continuous Planning Is The Future Of FP&A

Finance teams

Seasoned finance leaders share why FP&A teams will turn to continuous planning to take on an uncertain future with agility and confidence.

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Priyaanka Arora
November 18, 2022
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3 Powerful Reasons Continuous Planning Is The Future Of FP&A

Summary

Financial planning traditionally provides a retrospective of the company’s period performance and financial health.

But companies are quickly realizing the value of a forward-looking mindset in highly competitive and volatile markets. And periodic financial planning no longer empowers the instant decision making required of leaders today.

One of the key areas of focus for FP&A teams moving forward is continuous planning. The idea that planning can occur alongside strategic execution, feeding into it and adjusting it to account for ever-changing variables has the power to transform FP&A into a driving force of success.

Read this summary of an insightful discussion between Pigment’s Head of Finance and other experienced finance leaders on this important trend affecting FP&A teams around the world.

You can find a link to the recording of the complete discussion at the end of the article.

Brief overview: what is continuous planning in FP&A?

Continuous planning in the FP&A context is a framework of agile and dynamic financial planning on data and models that are updated in real time to always reflect the latest state of the business, including any internal or external factors that impact it.

Compelling benefits of continuous planning include a planning process that:

  • Is highly flexible 
  • Quickly adapts to changing scenarios
  • Maintains and grows shareholder value

What are the three types of continuous planning?

Continuous and real-time planning is mainly made possible by completely integrating three key FP&A components:

  1. Strategic planning
  2. Financial planning
  3. Operational planning
Types of continuous planning in FP&A

Each component, from planning to strategy, fits seamlessly into the bigger picture of planning and is bolstered by cross-functional data sources and collaboration. As an end result, FP&A teams enable achievable results at all levels and functions of the organization.

But to be able to reap the benefits of continuous planning, a support system — including executive sponsorship and tooling support — is paramount:

“Everyone participates in the planning process and having a tool to support that flexibility is paramount to achieving continuous planning.”
Chloé Giraut, Head of Finance at Pigment

Three reasons why continuous planning on EPM software will drive the FP&A revolution

The essence of continuous planning is the flexibility to make fast decisions, with the freedom to adjust the path set by those decisions at any given time.

The world is changing at a micro- and macro-economic level on a daily basis, and FP&A teams bear the brunt of these changes in the following three ways:

  • Traditional planning models are broken — annual planning no longer supports real-time decision making, causing a mismatch between FP&A team output and the company’s results
  • Finance teams fail to adapt their models quickly to changing marketing conditions — causing large, unexplainable gaps in meeting targets
  • The need to combine accuracy with flexibility — without the automation of cross-functional data flow, FP&A teams are not truly agile

Enterprise Performance Management software (EPM) steps to the forefront of solving these challenges within a single solution capable of scaling to support high complexity.

“You need a common denominator to bring together cross-functional teams - with an EPM, you can integrate unlimited real-time data sources into your model and run multiple scenarios at the same time which is very helpful during times of uncertainty.”
Chloé Giraut, Head of Finance at Pigment

In summary, EPM is an end-to-end solution providing a single source of truth to all stakeholders. It provides unforeseen flexibility and adaptability to FP&A teams, which is the main competitive advantage of continuous planning.

Few functions are transforming as fast as FP&A, and finance leaders who invest in continuous planning with EPM software will position their teams as a strategic partner to the success of the business.

This article was a summary of our webinar with FPA Trends, featuring our Head of Finance, Chloé Giraut. For the complete discussion, watch the webinar recording.

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