- Point of view
Reshaping financial planning and analysis for agility and resilience
How to provide faster, more accurate insights during a pandemic
As the world responds to the ongoing impact of COVID-19, businesses are looking beyond the initial need for remote-working solutions and preparing for what lies ahead. According to the Institute of International Finance in March, “Global growth could conceivably approach 1.0%, far below the 2.6% [recorded] last year and the weakest since the global financial crisis." And large numbers of publicly traded companies have warned investors of the threat Coronavirus poses to their performance and have revised their forecasts for 2020. Because of the nature and scale of the pandemic, many organizations are struggling to model and predict its long-term implications. Their decisions are currently driven by the need to maintain business continuity.
Businesses are turning to their financial planning and analysis (FP&A) teams to guide them through the crisis. But with demands for daily, or even an hourly forecasts, not all are able to meet expectations. We've identified three stages – agility, cost, and resilience – that will help organizations build a more robust FP&A function, enhancing how it informs a company's strategic decision-making.
But first there are challenges to overcome:
FP&A teams play a key role in guiding their organizations through disruption. In Genpact's recent survey of more than 500 senior finance executives, generating actionable insights for the wider business" is among the top-two expectations for finance teams by business leaders for the next two years.
The time frame for meeting the demand for insights has just become much shorter. Coping with uncertainty requires more than just thoughtful analysis. Inaction can be fatal. And the need to make the right decisions at the right time – before competitors do – becomes all-important.
Business leaders across industries are struggling to understand what impact the pandemic will have across their operations, supply chains, customers, vendors, and employees, and are turning to CFOs and their FP&A functions to gain meaningful insights and forecasts. These teams have new data to analyze, insights to generate, and actions to take. Figure 1 shows what this means for different sectors.
With fast-changing scenarios, FP&A teams will refocus their priorities to help the organization continue running and grow in the long run. We believe that FP&A functions should focus on three priorities over three phases in the next two years.
These initiatives can be measured across four dimensions: speed to value, cost, business impact, and user-experience improvement. Figure 2 summarizes how FP&A organizations are reprioritizing initiatives:
As FP&A functions work around the clock to support critical decision-making under testing conditions in the short term, they must transform for the long term, too. They must reprioritize their initiatives – focusing on agility, the cost to serve, and resilience – to help their organizations survive and grow.
The journey starts with teams improving their speed of response as an immediate action and evolves into future-proofing the FP&A functions against new disruptions. This requires organizations to adopt a combination of scalable operating models, integrated business planning, analytics on demand, and business partnering. Only then can FP&A functions be nimble enough to make faster and more strategic contributions.
Learn more about how Genpact can help with enterprise performance management.
This point of view is authored by Vivek Saxena, F&A Service Line Leader; Lavi Sharma, VP, Record to Report; and Kinnar Sanjanwala, VP, FP&A, Genpact.