xP&A, or Expanded Planning and Analysis, is an increasingly popular methodology for driving business performance across the organization. Leading businesses unify operational and financial data into one platform, creating a single version of the truth to improve planning, reporting, and analysis for more effective decision-making. In this article, we will be discussing why you should begin to transition to xP&A and what it will mean for your business.
Faster Decision-Making
In today’s business world, no matter your industry or sector, you need to be fast and agile when it comes to decision-making. Whether you are responding to evolving market conditions, operational changes, or you need to assess and seize an opportunity before it passes – timing is critical. xP&A puts all the information you need in one platform, with unified data from across the business, so that your financial planning and analysis team can make fast recommendations for management decision-making based on accurate and up-to-date metrics.
Single Source of Truth
Currently, many businesses are using siloed data – different departments use different data sources, or at the very least, they use shared systems or data in various ways. Two division heads could be basing decisions on different data at any given time, possibly leading to conflicting conclusions. xP&A uses one shared platform that collates all relevant business unit data, presenting one unified reference point for management decision-making.
Strategic Alignment
That single point of reference leads to a better alignment with strategic goals. Not only can more realistic organizational goals be set based on accurate data, but each department can visualize where their department aligns to the company’s strategic goals and then work towards meeting them. xP&A aligns the entire company with the overarching strategic vision and allows you to drive the strategy forward by cascading goals across the company.
Explore Alternatives
When it comes to management and leadership decision-making, a key strength is assessing alternative scenarios. Unfortunately, this is at odds with the requirement for quick decisions. So often, different paths are not fully explored or considered in sufficient depth – resulting in missed opportunities for accelerated growth. When all of your metrics and data are centralized and manual processes are automated, more time is available to explore alternative scenarios. Augment scenario modeling with the predictive analytics capabilities of leading xP&A platforms and management can assess different decision alternatives expeditiously.
Improve Collaboration
Alongside greater alignment with corporate strategy, your company will benefit from improved inter-departmental collaboration. Nobody operates in a vacuum anymore as shared goals foster cooperation across the company. The xP&A platform enables users to connect, share, and work together on plans, reports, and analyses.
Business Partnering
Business partnering aims to impact decision-making through insight and influence to help drive business performance. These are high-value interactions with the operating decision-makers and influencers. There is a fundamental link between the xP&A platform concept and business partnering that best-in-class businesses exploit to the fullest. The xP&A planning platform frees up the FP&A team’s time to engage with the business units as trusted advisors by automating low-value activities and providing essential insights.
Finance drives the move to xP&A
We have spoken a lot about how expanded planning and analysis require buy-in from all stakeholders, company-wide, and how it is unifying non-financial and financial data. However, who should drive the move to xP&A? Historically, Finance leaders have better cross-departmental knowledge and understanding of drivers, an analytical mindset, and crucial access to executive-level leadership. Any initiative towards xP&A will almost inevitably come from the finance department.
Your Roadmap To xP&A
Transitioning to xP&A is a journey – you are looking at fundamentally changing the strategic culture of your company, after all. You can break the process down into a few more manageable steps to ensure your success:
- Set a flexible plan you can follow. Following a playbook will build engagement and credibility through small wins along the way.
- Understand that your business is unique. There is no one-size-fits-all approach – each company has different demands, requirements, and goals, and you need to build them into your xP&A strategy from the very beginning.
- Choose the right solution partner – critical indicators of a high-quality platform provider are a collaborative approach, experience, and the willingness and ability to train your planning and analysis team on the new system.
Peak Analytics
Peak Analytics helps organizations transition to an extended planning and analysis solution. We have spent years in corporate performance management, financial planning and analysis, and planning platform application development. This experience gives us the broad skill sets and deep-level expertise needed to build solutions for our clients to enable better decision-making. Our team works collaboratively with each client to understand the company goals and processes before developing a custom application using cutting-edge cloud technologies and best practices. You can find out more about Peak Analytics by visiting our website or more about xP&A by downloading our whitepaper.
