Fatihah Ramzi, DigitalCFO Asia | 14 February 2022

For companies that seek to enhance flexibility while still maintaining the visibility of their business processes, xP&A will be the best solution.

xP&A is a planning methodology that expands the greatest financial planning and analysis (FP&A) competencies throughout the company, such as continuous planning, projections, intelligent systems, and performance measurement. xP&A not only gives operational divisions the power of FP&A, but it also breaks down conventional barriers between finance and operations and links strategic, financial, and operational plans in real time. xP&A helps firms enhance visibility and become much more flexible and responsive by coordinating plans across the enterprise. This has never been more vital than it is now, when continual change is the new normal and the capacity to pivot swiftly is no longer a luxury, it is a requirement.

Financial Planning and Analysis (FP&A) is a cornerstone of financial management. Although many controllers and finance teams still use spreadsheets as their primary tool for planning, current platform technologies are progressively being used to automate, integrate, and revolutionize organizations’ planning and reporting processes. Larger data quantities and automated processing open up new options for more exact planning, supervision, and adjustment of more than simply the financial side of the organization.

Because the tools employed for this are not restricted to a single sort of data, organizations can use them to increase insights for other business processes as well. This is the point at which FP&A becomes xP&A. The “x” in xP&A refers to X-tended planning skills, which have a tremendous, relatively unexplored potential for businesses of all sizes and industries. Enhanced data-supported insights can help drive smart decisions in sales, procurement, HR, marketing, as well as many other areas where data is gathered but often goes unused.

Key Benefits of xP&A

Holistic Business Visibility Which Allows For A Single Source of Truth

Many businesses face contradictory interpretations of the truth, which is often caused by divergent IT systems and vast amounts of data stored in several locations. xP&A establishes a single source of truth, allowing planners and decision-makers to operate with the same data and numbers. xP&A also eliminates departmental barriers by providing a single, real-time picture of plans and performance. This picture, along with cross-functional analytics and reporting, may help business leaders comprehend the implications of actions on each department and the company as a whole.

As a result of having a cross-functional perspective of the business and a single source of truth, businesses are more agile, and executives are better equipped to grasp what is going on in real time and course-correct on the fly. Tight business alignment also enables them to grab new possibilities quickly, identify and mitigate risks, find cost-cutting and inefficiency potential, and move as quickly as a startup.

A Full Business Alignment

With xP&A, strategic, financial, and operational plans all in sync, the entire company is on the same page and working toward a same goal. xP&A also clarifies how the operations of one department affect the actions of another, encouraging teams to collaborate and coordinate on priorities. This enables companies to incorporate operational sub-plans into overall planning and to support planning and analysis with operational drivers. Finance now has a far more thorough picture of the company’s performance and can use it to make proactive enterprise performance management decisions.

Allows For Automated And Continuous Planning

Continuous planning, in which plans are revised on a regular basis in response to changing conditions and circumstances, is at the heart of xP&A. This is made simple by good xP&A tools: when a change is made in one plan, all associated plans are automatically updated. Even in times of rapid change, this automation reduces manual labour and maintains everything in sync.

Integrated business planning (IBP) is an important part of the xP&A strategy for automated and continuous planning. The integration of planning procedures throughout an organization into a single solution is known as IBP. IBP enables seamless integration of planning and execution. Few people realize that this can be done with both financial and non-financial data, which is what xP&A provides to firms. The possibility for optimizing value generation in each business function where data is gathered becomes attainable with xP&A.

One of the many facts highlighted by COVID-19’s quick turbulence and unpredictability is that previous planning approaches will no longer suffice once the pandemic has gone. Rather, the key to recovering from the pandemic and moving past it will be through integrated, continuous planning across the company. The age of xP&A officially begins in 2022, and it is here to stay.