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Product and Topic Expert
Product and Topic Expert
As a solution manager for Planning & Analytics the term of extended planning & analysis (xP&A) is not new to me. Therefore I was most delighted when it came up in a break-out session at the recent FP&A trends event in Amsterdam. For good measure I’ll define it quickly though, before I dive into the lessons learned from FP&A executives at the FP&A trends event.

xP&A is the combination of multiple planning processes and capabilities into a connected, enterprise-wide planning approach. xP&A provides a seamless and superior end-to-end planning experience for enterprises. As the name suggests, xP&A goes beyond the boundaries of traditional financial planning and analysis (FP&A). Here, the “x” is not a variable that stands for any one department, like sales, supply chain, or HR. Rather, xP&A denotes the connecting of siloed planning activities and plans between finance and every other department. This planning approach bridges the traditional barriers between finance and operations and connects strategic, financial, and operational plans.

This concept is not new. Expanding FP&A beyond finance has been a common practice for several years now. Extended Planning and Analysis has been referred to by many different names: connected planning, collaborative enterprise planning, integrated business planning, and company-wide planning, to name a few. Analyst firm Gartner has formally defined this process and concept xP&A.
Now back to the event.

Working at a technology vendor we tend think in technology terms quite quickly, which is usually to my benefit in my daily work. In a broader context this can however be narrow minded, as such I was pleasantly surprised with the view given to me at the recent FP&A trends event by some top level FP&A executives.

Me and said executives went into a break-out room to discuss the question; what are the practical steps towards xP&A? Here the first word to be discussed was “Buy-in”. Buy-in was agreed to only be achievable if the concept can be presented with sufficient relevance to the business. Here we also noted the term xP&A could potentially best be avoided when gathering buy-in. This because xP&A is not a term typically native to the business and could potentially make finding relevance much harder.
Whatever you do, don't call it xP&A

To be able to get to the right wording and positioning for buy-in, the responsible team should have adequate business acumen. A clear understanding of the value flow of the business, an understanding of shop floor logistics for example at a retailer.

We agreed that this business acumen is not necessarily commonplace with Finance professionals, and should be accrued within the business through for example internships within the specific business departments.  Taking the retail example again, one could imagine an FP&A expert working the cash register or helping customers with complaints.

Motivating Finance professionals to acquire this knowledge does require a certain degree of curiosity in the business process. As a group we agreed that this should be a critical point in the hiring process. Some people in the room even emphasized they already hired non financials in the finance team with the right mindset to learn finance as well as the business.

Now that we've worked all the way back to the recruitment process we can summarize and work our way back to xP&A with the below framework.

  1. Hire curious professionals

  2. Train them in the field of Finance AND the business (internships)

  3. Let this team work with the business to generate the relevant case for xP&A

  4. Gain strategic buy-in with the well prepared, and business relevant case

Following this framework generates a solid foundation for success with xP&A, and is a great insight that we've been able to generate during the FP&A trends event.

If you want to learn more about the concept of xP&A, be sure to check out this Insight.