IDC InfoBrief: Assess your business planning maturity

How mature is your organization with regards to business planning? That is a question FP&A teams must have an answer to, according to a new IDC InfoBrief titled ‘Advance your integrated planning to navigate a dynamic business environment.’

“None of the last four years have been a normal year.”

That’s according to an FP&A manager from a professional services organization interviewed as part of the brief, and it’s why there’s so much pressure for the finance function to evolve. It’s now expected to undertake:

Reporting and record keeping‍

Core financial activities must still go ahead - there’s no change here. But the brief argues that finance teams must find ways to compress the time spent on these BAU activities - to make room for expanding responsibilities.

Expanding responsibilities‍

Finance is now expected to drive digital business transformation, support new business models, and automate end-to-end processes. It’s also important in compliance and support for ESG activities.

Strategic business advisory, and value creation‍

Finance is the department best positioned to identify new growth opportunities, as well as determining where resources and investments are best spent. To do this, close collaboration with and communication to stakeholders across the business is essential.

The brief then identifies three core areas that the finance function must focus on to enable all of the above: scenario planning capabilities, precision, and aligning strategy to execution to ensure plans get into motion fast.

The best way of doing all of the above is to improve the maturity of your integrated business planning capabilities.

But before you can make progress, you need to know where you stand. The brief outlines a framework organizations can employ to assess where they’re strong, where they’re weak, and the most sensible steps they can take to improve their standing.

IDC splits the maturity framework into three ‘dimensions’ - data & tools, processes, and people & culture.

Let’s examine people and culture. 

Traditional (maturity level 1)

At this level:

• There’s a lack of C-level engagement with business planning
• The finance function may have poor data literacy, and no focus on soft skills development
• Most of FP&A’s time is spent preparing data and then generating reports
• Finance is seen as a data broker
• High attrition rates across finance
• Lack of career and expectation matrices by role and seniority
• Limited cross-functional relationships and alignment between financial and operational goals

Transitional (maturity level 2)

At this level:

• Increased engagement from C-level executives, who have begun to see value in integrated planning
• FP&A are consulted on strategic decisions
• Introduction of upskilling and talent management programs
• FP&A starts actively seeking collaboration with other business units for joint planning initiatives

Advanced (maturity level 3)

At this level: 

• Full C-level engagement, with advanced change management programs to drive adoption
• Majority of FP&A time is spent on proactive opportunity identification, since repetitive tasks are fully automated
• Comprehensive talent management, data literacy, and soft skills programs are in place
• Strong cross-functional collaboration, alignment between financial and operational goals

For each dimension and maturity level, the brief then gives actionable next steps for organizations crafting an action plan.

It also includes insight from CFOs on:

‍Tools

“You can have the best functionality in the world, but if it’s not user friendly, people simply won’t use it. It all comes down to ease of use and instant value to the user. Having the right tools is key to ensuring financial and operational consistency. The choice of the tool is so important, because many solutions aren’t quite right.”

‍Implementation

“We rolled out a new tool about 18 months ago in what we thought was a cost-effective way. But in everyday use, it’s clear that some functions are simply not operating as we want or need. A totally new implementation of the tool is necessary, so that we can actually use it to its fullest and realize an effective return on investment.”

Driving adoption

“Rolling out new tools built around a single repository can be challenging. Everyone has already developed their own processes for their own data. So, it’s a case of showing why the new system is better, while also managing the removal of older systems, tools, and applications.”

Relationships with the business

“FP&A is seen as an essential resource for the business, but there is also a level of mistrust from different functions, with each having its own datasets and views. Being more collaborative can help change that a modern FP&A setup can empower functions to better understand their own data, access other relevant information and make better, more educated decisions.”

There’s plenty more valuable insight based on IDC’s research, all worth reading and discussion at your next team meeting.

The full brief is available for download here.