Using Numbers to Tell a Story

A Financial Planning and Analytics (FP&A) professional is essentially a storyteller. The FP&A analysts dig through numbers, analyze trends, understand driver and try to answer the question " So what". What are the insights that can help leadership take the right decisions? 

Let’s consider the analogy of making a stock. To make a stock, one must first identify what will the stock be used for - soups, stews, sauces etc. Do you need a vegetable stock, chicken stock or a beef stock?  Once the use and type is identified, then the stock is made by boiling down the right mixture of bones, meat, vegetables, mirepoix and spices, skimming the foam regularly and then filtering the prepared stock to be used in various stews and soups. The clear stock is then used for various purposes while the rest of meat, bones vegetables etc. are discarded. 

In the same way, to do a good analysis we must start by identifying the goal of the analysis. Identifying the question, we are trying to answer will help an analyst understand the story   that the numbers might tell. Once the goals are identified, then we need the right data, assumptions and tools to conduct the analysis, continuously refine the analysis and then present the output in a clear and simple manner.

Analysts tend to present all the work that was done but its imperative to filter down the analysis to the top 2-3 insights so decisions can be taken accordingly. The insights can also change based on the audience that the analysis is being presented to.  One of the most important skills that an FP&A analyst needs today along with strong analytical abilities is the ability to communicate that analysis. This is a skill most of us learn on the job.   Here are a few ways, analysts can be trained on the art of story telling through numbers: 

1) Case studies such as HBS case studies do a good job in training analysts to look through myriad of information and pull out the most important facts. 

2)  Provide a problem with bunch of data related to simple question. The challenge given is to answer that question within 2 slides but the analysts will need to dig through the data and find the top 2-3 insights from that data that can help answer the questions. 

3)  Provide the analyst with the same set of numbers and some background regarding the company but difference sets of audiences (for example   Finance director, marketing & sales director, IT lead etc.). The task of the analyst is to figure out what is the question that each set of audience will be most interested in and then use the numbers to provide 2 -3 insights regarding each of those questions.

Numbers tell a story and the role of an FP&A analyst to understand and communicate that story in a simplistic manner. It is important to help analysts develop and hone their skills of how to make a clear stock of the ingredients they are given. 

What is diversity? - View from Majority and Minority

What is diversity ? The dictionary definition of diversity is " variety ; multiformity".  I actually never thought too much about diversity  till I became a minority in a different country. As a majority  in the country of my birth ( India)  I was among people who looked liked me, talked like me, dressed like me , ate like me  etc. We  still had diversity among us - diversity of languages, diversity of religions, diversity of thought  etc.  But still I  was part of a majority in Delhi - a hindu woman with her mother tongue as hindi. I did not stand out as anyone different and did not have to explain my culture to anyone.

But then in my twenties I moved to USA to study. I moved from Delhi - a city of nearly 20 million people to Pullman , a city in eastern part of the state of Washington  with a population of 33k people. That was quite a change  and here I was different. I was not in majority anymore  . I was among the minority and  not even a significant minority . I would always keep a look out for people who looked the same and that became  the starting point of friendships. I became more conscious of who I am and what is my culture. I took more time to understand my background and how do I fit in this country.

This perspective of being a majority and then a minority in another country has helped me appreciate diversity and give me a viewpoint that I wanted to share with you.

We hear so much about diversity but what does diversity actually mean ? Does diversity mean that

the majority adjusts to the needs to the minorities  by stopping the things that matter to their culture . I find the whole concept of not wishing Merry Christmas ridiculous. If in India someone had told me that I cannot say Happy Diwali  I would rightly be frustrated.  One can celebrate the festivals without offending the sensitivities of others. If some minorities get offended by  the majority wishing Merry Christmas then they need to think of  their own expectations. Even if you don't celebrate Christmas - you can wish someone else Merry Christmas back.  I had an interesting conversation with someone recently at workplace who told me that years ago their was a competition among the employees for best decorated cubicle or office  during Halloween but no one does it anymore. When I probed into the reason " why?" - she said we became more diverse and thought other people might not like it .  I found this sad and disturbing. Being diverse does not mean that you stop enjoying your own culture , Being diverse  for me means being more inclusive i.e. celebrating other cultures too along with your own. For me this would mean that   during Diwali I can wear my traditional dress for the day and wish happy Diwali  or have a good Indian lunch in the cafeteria along with participating in the Halloween competition and wishing Merry Christmas and  celebrating the spirit of peace and kindness during the holidays. For me diversity is  being invited to someone's place for an Easter brunch while inviting my friends and colleagues over  for a Holi party.  Diversity means inclusion not quiet exclusion.

Just like minorities in US need to understand the rightful indignation of the majority , the majority need to start including minorities in their celebrations. In my nearly 20 years in this country - I have been invited only once for thanksgiving  and once for Christmas dinner to someone's place. There are many minorities who have never cooked the traditional thanksgiving dinner or even know what is made on Christmas. Diversity meets inclusion - include us to be part of  your celebrations and come be a part of ours as a participant, Lets cook thanksgiving dinner together, light the diyas for Diwali, make gingerbread houses during Christmas, hunt eggs in Easter, learn the meaning of Hanukkah , enjoy the colors of Holi and taste the food  made during Eid together. Lets change the meaning of diversity  by enjoying all cultures and traditions. Lets share our plates since food is the way to the heart.

New Technology in the world of Legacy Systems

I attended the Association of Financial Professionals ( AFP) conference in San Diego on October 14th - 17th. It was my first time at the AFP conference and it was a wonderful experience to hear the latest developments in finance and treasury. It was great to network with people who have similar issues in their companies and hear how they are approaching to solve the problem, integrating new technology  and preparing for the changes in future.

There was so much new technology that was showcased during the conference. AFP mindshift was a new row of exhibitors as well as speakers that particularly showcased how these technologies are being commercialized and used.  Some of the ones that stood out particularly are blockchain, robotic process automation, artificial intelligence, predictive modeling, big data and analytics.  New startups definitely have an edge up in adopting such technologies as they are not tied down by legacy systems. But one of the main issues holding back companies in investing in such technologies are existing legacy systems.  Companies have invested millions of dollars in existing ERP systems  that are the back bone of their businesses and  with changes happening so quickly around us it becomes difficult to  develop a clear technology strategy for the financial function.

Finance needs to start adapting to technology and partnering with IT on the future technology strategy of the company. No company today can work in isolation from these changes and all its functions -  finance, HR, sales & marketing , manufacturing etc are being impacted by these technologies.   Finance function is being looked on more and more to answer not only the question of what happened   but what should we expect going forward and why - it becomes imperative for the the future finance leader to understand the language of technology and work hand in hand with  information technology experts to shape the technology strategy  of the company for the future. The technology strategy should line with the goals of the business, deliver value and be a united  outlook for the company  with the ability to be agile ( change the course as needed).

Big data for example is not just the domain of finance - but also for marketing, supply chain, R&D etc.  Thus  a company's strategy for data assets should not be based on the needs of one department but the holistic needs of the company itself so we get one version of truth from  the data asset.

Companies need to develop a 3 -5 year information technology strategy  and finance has important part to play in this strategy development to help understand the value in technology investment.

How is your company / organization adapting to the new technology  and planning for a technology strategy ?

5 Leadership Lessons learnt by Coaching Junior Lego League

Legos, Legos everywhere …. That’s what my coaching looks like.  I have been coaching Junior Lego League team for the last 3 years. I started this team when my elder daughter was in kindergarten and now she is in 3rd grade and the team is still running strong. I am starting another team this year with the kindergartners – this time with my younger daughter.   

Leading a team of kids through a season of a Lego league where they learn about a topic, plan and build a model, program parts, learn to work as team, share, argue, put their learnings on a poster board and then finally present and share their findings, has been full of so many leadership lessons for me as a coach. I work full-time in a leadership role and I can see how training a few junior school students provides leadership lessons for all adults

Here are the 5 most important lessons I have learnt from coaching kids for the Lego league:

Model in Kindergarten 

1.       Team ownership and pride: Kids in elementary school play together all the time but they don’t call it teamwork (or rather team play really).  Kids compete with each other to gain praise which is exactly what adults do too but not in such an open way.  I had to constantly work with the kids to help them understand that they are not really competing with each other when working in a team. They should be proud of what they all create and they don’t need to point out what each of them made in the model. It is a “TEAM” effort.  They may not agree with how things were done or all parts of the model but still it is their model which they present to others.  Leaders in real world need to help teams work together and celebrate the successes as a whole – the whole team should own the whole output not just parts of it.

2.       Listen to the ideas: Kids have to be taught how to “listen”. But so does any team – are the members actually listening to each other or predisposed to dismissing an idea in their heads with a “but” or a “no”? While coaching the Lego team, we established rules regarding listening to ideas by letting the kids express their ideas in their engineering journals first, and then present it while other team members listened.  By enforcing this simple rule, we came up with a combinatorial set of ideas for our team logo, model variants to build and test and, final presentation strategies. This helped team members who were not that confident about their ideas be included in the discussion. As a leader in the workplace, I learnt the importance of just listening (and trying not to have misconceptions prior to listening) and taking the time for in-depth discussions and brainstorming which allow everyone to express their ideas in different ways.

Model in 1st Grade

3.       Let them disagree …. But teach them on how to agree: One kid wanted to put a star wars figure in the middle of a wildflower garden model created by the team to show the relationship between bees and hummingbirds – that was a big disagreement in the team.  The kids argued and disagreed about it for quite some time with emotions running high.  As a coach, I let it happen for some time as I wanted to see how they would solve this problem. But with emotions running high and kids being kids, everyone was ready to have a melt down – I had to step in. This is where I worked with them to come to an agreement. Could we have another Lego figurine in the model or a little shed where the Star Wars figure could be put   with a storyline around it.  The kids came to an agreement which seemed to satisfy everyone and the model still worked (phew!!).  We have disagreements in work teams all the time. Some disagreement is healthy – it helps us make our results better. But at some point, the leader should guide the team to an agreement –  to make the output of the team better. We cannot keep the conflict under wraps because it would still keep coming up but rather steer the team to solve the conflict.

4.       Observe and understand the strengths of each kid: Every kid is special and brings a quality to the team. Some kids were good in planning the model and the whole picture, some kids were good in programming, some kids were good in art and making the poster. It takes times to understand what each kid is good at, let them develop the talent and give them a chance to work on things they are not so confident about. The goal of the Lego leagues is to help in holistic nurturing of talent. It was important for me as a coach to let the kids work in their comfort areas and challenge them when they seemed ready for it.  As a leader in an organization, each member of the team brings different expertise – it is important to recognize that talent and nurture it but also give them a challenge in other areas within their comfort zone. Successful leaders nurture the diverse talents in their teams.

Model in 2nd Grade  at World Robotics Festival 

5.       Explain to a “kid with curiosity”: As a coach to kids I had to answer a lot (believe me – a lot !!) of questions over the years and it forced me to explain complicated concepts in simple ways – use tools such as drawing, videos and books. My audience were kids and I wanted these kids to ask me a lot of questions.  I took the time to understand my material and then explain it in 3-4 main ideas. The discussion used to change midway if one of the kids asked an interesting question but I had to make the connection back to the 3-4 main points. As a leader, we have to communicate to our teams and to other business groups.  Using simple storylines, graphics and just fewer words helps to simplify communications. We need to keep our storyline within 3-4 main concepts, encourage the questions but make sure that the audience remembers the simplified message. Think of your audience as a “kid with curiosity” – and start with a very simple storyline to communicate.

Sports is full of stories of great coaches. Great coaches are also great leaders. Coaching kids is a two-way street – on one hand, you as a coach can impart your knowledge to the kids and see them learn and blossom but on the other hand, you can learn a lot from the kids and become a better leader and coach.

Bringing the Change in Finance

This is the 5th blog post in my series  about "Challenges for FP&A in the world of Big Data" Here are the links to previous posts:
1. ERP systems Adapting to Big Data
2. Process Change in Budgeting & Forecasting
3. Data Scientist as a job function within FP&A
4. Finance as the Gatekeeper in the era of Big Data

Now lets talk about Change Management.

Let me start by saying that I am not a change management expert . But I have lived through a number of changes and transformation within different companies.
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Heraclitus correctly said " The only thing that is constant is change"

Organizations are always going through change - some brought about due to changes in the market, some brought about due to change in the direction of the company, change in leadership - whatever it may be. We seem to be a period of constant change. I strongly believe that in order to survive in today's world  one has to be "very" comfortable with change. Look at the pace that new technologies are being adopted everywhere  - in all facets of our lives.  Yes some people have to be pushed towards it a little bit more than others - but people who are not ready for change have a tough time surviving in this economy.  

So when we talk about " change management" - I think it is more about really defining the scope of a particular change and managing the planning and execution of it.  One of the strong beliefs that runs in the companies today is that since " we have been doing things a certain way " we have to hire consultants in order  to bring about a  real change. So in comes an army of consultants  who runs the analysis and tells the company - this  is how you have to do the change.  I don't think this is necessarily wrong but  do we need to discount the talent that exists within the company.

We are all trying to do "more with less". With big data the challenge of change becomes even more difficult . As mentioned by the Harvard Business Article "Big Data : The Management Revolution"  the three key differences in this big data revolution vs increased analytics is  volume, velocity and variety  of the data we are getting.  So the change management within this becomes even more important - since the outside markets are changing at a very fast pace.

I believe that there a few fundamental principles that need to be followed within such a pace of change management:

Project Team 

1. Executive Sponsor: Every  major change project needs a champion or a leader. 
2. Find the experts within your function  and  dedicate them 100% to this project ( this should not be a " development" or "stretch" opportunity for someone) - This internal team of experts should do the initial analysis of processes that need a change, define scope of change , budgets and timelines. This team of experts should be given the access to extract data from various sources and  be given the highest priority during the time of planning.  This team should also be responsible for execution and delivery. 
3. Hire a consultant - But remember the consultant works for you. The consultants can bring in the knowledge of industry and provide advice but the deep dive analysis , opportunity mapping, scope definition  etc should be performed by internal experts / employees
4. Have a dedicated project manager (s) 
5. Communicate  regularly
6. Plan  how to measure the impact and then measure it - Understand the KPIs that should be measured as well as how these will be calculated should be agreed upon before the projects / changes begin.
7. Be Agile: As  teams start executing the projects / changes, more unknown items are discovered which might require course correction or change of goals - be agile and open to change within a project

So lets get ready for the change  with "Big Data" revolution.

Finance as the Gatekeeper in the era of Big Data

We have data everywhere  and with the advent of new technologies we  are now getting the ability to collect the data , access and use it.  Data brings with itself  the ability to mine new information and provide new insights into trends etc. But with big data also comes into question more risk of the data being compromised to outside sources, data quality issues,inaccurate data etc. The more we use data in decision making, the more important it becomes that  their are controls and compliance around the collection, storage, access and use of that data.

According to  Deloitte's CFO signals Q2 2017 report  more than half of the financial professional surveyed say they are not yet moving beyond the piloting phase for emerging technologies . Of those who cited aggressive use of new technologies 77% reported improved consistency and controls was the top improvement area while improvement in analytical/decision support was next at 75%,

Quoting Isaac Tucker, VP Product Management , Blackline, "The challenges with data will always relate to volume and complexity, and that is only going to increase as companies increase their adoption of technology. As more and more data is collected, someone has to make sure that everything is correct, and the buck stops with the finance chief.”

FP&A Center of Excellence

Issues in data management, access, quality, use etc can cause of lot of problems.  This is further amplified in the area of financial planning and analytics as this data is used for reporting KPIs, developing forecasts, making decisions for the future strategic direction of the company etc. Missing or inaccurate data can lead to incorrect decision making, delays  and missed opportunities  and in some cases compliance  issues with reporting agencies.  As I mentioned in my last blog post , Data Scientist as a Job Function within FP&A,  their is a need for the an FP&A COE or Center of Excellence where data scientists  can work together with FP&A professionals to manage data assets  and develop predictive models for forecasting. It is this centralized group that can develop data governance and compliance. Today much of the financial data  and models are distributed in excel sheets, ERP systems  and the general ledger etc.  This requires  FP&A analysts to spend time consolidating data from different sources, ensuring that the data is accurate and reconciling different versions of truth   which means that today FP&A analyst spend 90 - 95% of their time cleaning the data and getting it ready for analysis and 5-10% actually " doing " the analysis. Data governance becomes a secondary requirement in this activity especially when no central or standard controls exist.

In the end , it is the financial data that gets reported in the market  and  majority of the KPIs used to measure progress and performance  are based on financial data.  All the marketing and sales analytics should reconcile with financial analytics making finance "the gatekeeper" for data governance and compliance for the company.

Data Scientist as Job Function within FP&A

So does a data scientist have a career path in Financial Planning & Analysis ? Why does the FP&A function need someone who has specialized in  data analysis , statistics  and data modeling. Why can't the finance function just partner with IT or data analytics team in the company to get what they need ? There are many such questions that will cross your mind when we talk about modifying the organizational structure and actually introducing someone who does not have a background in finance or accounting in the field of finance.

Every function today is dabbling in big data and analytics whether it is sales and marketing looking at customer analytics or HR looking at employee performance analytics or supply chain optimizing transportation and production   through supply chain analytics.    Mary Driscoll in her  article " CFOs want analysts trained in finance data science" refers to the study by APQC , her business research and benchmarking firm, that found that 95% of the financial professionals surveyed pegged data science as important to some degree. She aptly says" If the business is becoming data-driven, financial forecasting has to be driver-based and nuanced. And that means teasing apart probable economic consequences across the chain of value creation."

Today majority of the FP&A professionals develop forecasting models on excel and manage the models independently  with each business unit/ area developing their own models . Their is minimal synchronization or standardization of the models leading to a  lot of manual work of reviewing the methodologies so the outcomes can be compared the same way.  Differences exist due to nuances in business unit, difference of skills sets, differences in data quality  etc. These differences become greater through the years due to  lack of standardization practices.

Even starting small such  hiring an excel expert in FP&A teams who is responsible for maintaining and standardizing the model on excel, adding VB capabilities  etc can go a long way in helping the analyst actually deliver on the " analytics" .   It would free up the time of the analysts to actually  do more value creation work.  these excel experts can become the standard bearer for standardization of the models and data quality.  But as  data becomes bigger , excel based forecasting models cannot keep up with the predictive and prescriptive modeling needs.  Finance functions will need data science experts to work along FP&A analysts to  develop such models. These experts  would know the source of the data  and how to apply various techniques  to develop models  but will work in conjunction with FP&A analysts who " understand" the data as well as the business needs and will guide the data scientists to develop the right models and explore the correct relationships.

One way  is to create a center of excellence for FP&A  which will develop and standardize the models, interact with IT for data needs  and develop information assets  and explore the latest technologies and techniques in the area of financial forecasting.

The FP&A professionals today need to become the agent of change  and advocate for the need of interaction with data experts. Finance function also needs to develop a career path for finance data experts/ scientists and work with universities to develop the training programs needed.

So where is your company in this area - do you have a data expert in your team. Looking forward to hearing your feedback and comments. 

Process Change in Budgeting and Forecasting

As mentioned in my first blog post,  there are  five main challenges  that face traditional FP&A functions today. I expanded on the first one , " ERP systems adapting to Big Data", in my last week's blog post.  In this post I will be expanding on  the process changes we need in planning, budgeting and forecasting  to support the transformation through big data.

I read a great article by KPMG - "Planning, Budgeting and Forecasting: An Eye on the Future". It gave a good definition of what is planning, budgeting and forecasting.

Planning is defined as  a top-down strategic activity that defines the strategic aims of the enterprise and high level activities required to achieve the goals of the organisation.

Budgeting is defined as an activity that enables resource allocation to be aligned to strategic goals and targets set across the entire organisation.

Lastly, forecasting is defined as an activity that tracks the expected performance of the business, so that timely decisions can be taken to address shortfalls against target, or maximize an emerging opportunity.

 A company should do all three of the above activities  to plan, implement and measure. With agile technology development , constantly changing technology  and digitization  the way we do these essential activities of planning budgeting and forecasting within FP&A needs to change.  Today these are static activities - we plan  in our strategic planning cycles for the next 3 to 5 years , develop a detailed budget for the next 1-2 years and forecast on a monthly or quarterly basis for the current year. But by the time a budget  is developed and approved , it is already obsolete due to to the changes  that have taken place  in the market or within the company more recently.  We then develop waterfall charts to explain the difference between plans, budgets and forecasts. A lot of  the time of the FP&A analysts is spent in chasing down the data to explain these waterfalls instead or really digging into the insights from KPIs and partnering with business to take strategic decisions.

Many articles today are suggesting we should move to dynamic planning. Brian Kalish describes dynamic planning  is his article " Dynamic Planning For A Dynamic World: Are You Ready For Change?" as " Dynamic planning enables companies to evaluate risks, seize new opportunities, adjust to new challenges, react quickly and properly to threats, adapt to changing technology, and make decisions that help it thrive" . Dynamic planning would still require long term goals  to be set but it would allow the  teams to revisit the ways that would achieve those goals in shorter time horizons. If dynamic planing is done  with flexibility and agility to would allow companies to do course changes quickly instead of making big bang investments  and then being forced to be married to it for some time. Rolling forecasts  is another way that more flexibility can be added to the process of  budgeting and forecasting. But  in some industries  or companies, long term investments have to be made  which will require a long term risk taking and investment. For example , for a manufacturing company investment in a new site is a long term investment based on the current and future predictions of demand at a certain point in time. Once a commitment is made to do an investment, huge amount of capital is invested in it and it cannot be abandoned after 1 year because demand changed.

We know  the current static process is not sustainable to the quickly changing technologies  and availability of huge amounts of data, but we still   have to plan  for  long term as well as short terms planning horizons.  Changes to the current static process have to be made keeping in  mind the needs of the industry.  Balance has to be maintained in the processes to take into account quickly changing technology vs longer term investment such as in fixed assets or R&D.

I believe we need to understand  and divide the budget into short term / dynamic variables vs long term / static variables. The short tern dynamic variables  items should be reviewed on shorter time horizons  ( monthly or quarterly) and regularly allowed to be updated  to achieve the goals while the long term static variables should be reviewed on an annual basis to achieve the goals.  This would require a different way to look at the P&L and balance sheet  and partnership with the business in understanding the short term and long term decision making impacts. I call it the hybrid planning process.


Thank you for reading. Please leave your comments here or  on linkedin. I welcome your feedback and comments.

ERP Systems Adapting to Big Data

I am not an expert in IT nor do I know a lot about ERP systems. But I am a user - specifically a user in the area of financial planning  and analytics.   As mentioned in my last blog post , one of the challenges for FP&A  in the world of Big data is the adaption of current ERP systems to the dynamically changing data / information.  This blog post tackles this issue from the point of a user.

Many companies today have already invested in a very expensive ERP system as a back bone of the financial systems.  These have been adapted  and modified to the needs to the company and industry. But the ERP systems in the current state  do not adapt well to the ever changing world of data and information.  The Aberdeen study notes that " Many organizations find that by the time they come up with a plan they are happy with , the plan is no longer feasible due to events that occurred while the plan was being composed.  They also find that they are ineffective at evaluating current trends to predict future performance and the impact of transformative initiatives".

Finance teams spend weeks or months developing a bottoms up budget  and a plan for the upcoming year . Historical data is used along with latest economic indicators  but by that time the budget is collated for an overall look of the company's performance expectations   and  approved, majority of that analysis is obsolete as the latest sales/ performance figures  need to be included, Their is a change in the market / economic indicators or new data / information is available which was not available even a few months ago.

As an analyst , I need systems that will help  me provide insights to the data / analytics rather than spend time collecting the data and then creating waterfalls to an earlier version of the budget regarding whats changed.   To  help develop an effective and efficient  organization that can maximize the benefit of  financial planning , the following  factors should be considered:

1. ERP systems should be stable  and well defined but have the flexibility  to adapt to changes business needs quickly and efficiently. 
2. There be the single source of truth - as analysts we spend a lot of time trying to reconcile different sources of data . Patchwork databases are created and maintained to collect data that cannot be collected in the existing systems leading to different sources of data. 
3. Planning systems developed on top of ERP  should be flexible and adapted to the lowest / most detailed level reporting and analysis that will be needed.  The reporting systems should not be created  for the leadership only because they will ask the questions from the rest of the organization. The reporting system should be adapted to the most the detailed level analysis that can / should be provided  and then summed up from there. The first dashboards developed should be for an analyst supporting the business. 
4. Technology updates and improvements should be done holistically - end to end - Business cannot update for their needs  without  working with finance. In the end it id the financial numbers that used for performance tracking / reporting. 
5. Systems should have the ability to incorporate , store and use data from various sources such as government data, surveys , 3rd party data etc  so it can be used in conjunction with internal data to develop predictive analysis.  Today a lot of this is done in excel sheets as analysts download data from internal sources as well as external sources to  develop insights and then load the updated plans . These trends, changes and insights are then explained on power point decks. 

According to the CFO research done in collaboration with SAP "~90%  respondents  feel, to maximize the measurable financial benefit of financial planning and business analysis, the finance function needs to spend less time on simply moving the data around—that is, spending time, attention, and resources on manually migrating and reconciling data from system to system . ( Here is the link to the article)

Ofcourse  the real change in technology also comes with the changes in  processes also. My next blog I will talk about processes changes  that are needed with big data.
  

Challenges for FP&A in the world of Big Data

Big Data is the new buzz word nowadays. Its all about analytics and data. But analytics is nothing new in  finance. Finance has always been about data, numbers, trends  and analysis . In other words, finance has always been trying to tell a story from the numbers.

These numbers have been static and based on a set of accounts , statements and records  for a certain numbers of years or months . These are then used to develop insights into trends so as to predict the future performance . Additional variables of market performance , survey insights, currency expectations , consumer sentiment and economic indicators etc are  added to help understand the impact of such factors as well as improve the forecast of future performance.  This is a static way of doing financial planning and analysis.

The difference today is that the amount of data being generated  and recorded is growing immensely and dynamically. Data was always being created but today their is a way  that we can record and make it available very quickly and in some circumstances  instantly.  Financial planning and analysis faces a huge challenge in how to incorporate this changing data into the traditional cycles of annual budgeting, monthly forecasting  and even long range planning.  Here are the 5 main challenges that I believe faces traditional FP&A:

1) Incorporate existing / legacy ERP systems with dynamically changing data/ information
2) Change current processes for budgeting and  forecasting
3) Make data managers and data scientists part of traditional finance functions
4) Compliance / GAAP/ IFRS - Finance  still has to be the gatekeeper
5) Training and change management


 What are the other challenges that you foresee  that corporations are facing / will face  in this area? 

Who, What and Why ?

My name is Geetanjali Tandon. I  have  15+ years of experience in corporate finance specifically in Financial Planning and Analysis  in various companies/ industries. 

I love numbers ..yes I am one of those people. I love working with numbers  but I am not engineer or a scientist . I am in finance and what I love most about it is that numbers tell a story . I work with numbers everyday and mostly am trying to figure out what is the story  behind the numbers - the " So what ". Even in a simple profit & loss statement we have a story  about how a company is performing.  So ofcourse with so much more data available I am really excited about the changes that we are seeing in the world of finance. 

This blog is all about Big Data and FP&A specifically i.e. How is big data changing the world of financial planning and analytics. I will bring together my experiences in the world of corporate finance  along with challenges we face everyday to talk about possible solutions, changes and impacts we can foresee.   This blog is for anyone  who works in finance   and deals with budgeting, forecasting, creating what if scenarios, developing financial impacts models  etc. This blog is also for the people from IT who are   in world of capturing, recording  and making this data available to the users - to help them understand the  issues/ problems of the users within finance . And of course this blog is for anyone who likes numbers , is excited about the changes happening in the corporate world  and wants to discuss solutions. 

Please read the blog posts and leave your comments and feedback.  Please share anything that you would like to discuss further and ofcourse tell me about issues/ challenges that you facing regarding the the transition/ transformations taking place in your companies. 

A little bit more about myself : 

Linkedin Profile: 

https://www.linkedin.com/in/gtandon/