For every enterprise, it is critical to have financial planning that is driven by data. But, when you are dealing with disparate reports and spreadsheets, making an informed decision can be a challenge, especially when the data is outdated and inaccurate.
Effective financial forecasting requires a holistic view of the entire business operations. Having a few ineffective reports can fail to highlight how enterprise data relates from one part of the business to the next. Not having holistic real-time data can lead you to miss out on opportunities that require quick decisions.
Getting a complete overview of your business operations gives you the much-needed edge in financial planning. Still, most FP&A tools don’t include all the required information in an easy-to-understand format. That is where the extended planning and analysis (or xP&A) comes in.
But what is xP&A, and how does it benefit your enterprise? Here’s what you need to know.
What is Extended Planning and Analysis (xP&A)?
Coined by Gartner, xP&A is an enterprise planning strategy that facilitates financial planning with real-time data from across the enterprise.
This strategy uses a single integrated platform like Power BI to aggregate and analyze data from various sources instead of reviewing only financial data when making enterprise-wide business decisions. xP&A extends beyond FP&A by consolidating all data into one platform for simple reporting & analysis.
Traditional FP&A is focused on planning for the future based on what happened in the past. This means unanticipated business shifts in any department can instantly make the projections obsolete. Even if data is routinely collected from the different business units, it is an unnecessary challenge to comprehend information manually collected through different reports.
Modern FP&A calls for a broader scope of the business and a single source of truth for data. Organizations gather cohesive data from each business unit that has the power to affect enterprise financial objectives and decisions. But, if your enterprise uses different tools to track that data without any standard for reporting, you may not be able to comprehend all the data you require for informed financial planning and analysis.
The secret to xP&A’s success is an integrated, collaborative platform. Having a platform-centric strategy helps you in collating data, combining domain-specific planning tools, and running reports that include the most relevant queries. All the information you require is right at your fingertips and is updated in real-time.
Why xP&A is Important
Having the ability to make quick & informed decisions is critical to enterprise success. However, most enterprises aren’t as agile as they should be to identify and seize opportunities. According to Gartner, only 3% of businesses have an aligned and integrated solution to analyze strategic, operations, and financial data.
Without having the right KPIs, enterprises end up making decisions that are not based on the relevant information.
In numerous cases, non-finance leaders may not even recognize what data is vital for FP&A and don’t realize the valuable information hidden in their data. When executives make decisions based on reports extracted days or weeks before, they often miss critical trends on the horizon.
This is where an enterprise-wide BI platform like Power BI and an xP&A strategy makes a big difference for your enterprise. xP&A epitomizes the three pillars of FP&A: People, Process, and technology. It makes decision-making more simple and user-friendly for your teams. Leveraging powerful technology that unites departmental data tools promotes a better enterprise culture and less labor-intensive analysis for every team and department.
- Gain Real-Time Data & Accessibility
With real-time data integrated into a single platform, updated reports can be run and rerun to provide financial executives a holistic view of what’s happening in the business right now. Any member with the proper permissions can swiftly and effortlessly run queries for analysis from these platforms without relying on the IT team every time they need updated data.
- Improve Productivity & Decision-Making
When real-time data from across the organization is drawn into a report with a simple query, decision-makers see the complete picture and make decisions based on the most pertinent data from each business unit. XP&A enhances productivity by significantly reducing the lead time for reporting. Moreover, Automated workflows simplify processes and make planning less time-intensive.
- Increase Collaboration & Information-Sharing
Financial planning and analysis can become a more collaborative experience with process workflows. With more organizations shifting to permanent remote work, organizing in-person planning meetings for critical decisions is becoming more challenging. Remote collaboration and communication are simplified by an xP&A platform, helping your teams remain on the same page and share data throughout the enterprise.
Moving from a finance-centric FP&A strategy to a more inclusive xP&A strategy cannot happen overnight. It requires a detailed roadmap to attain full participation across the organization.
Bringing in new technology or expanding the use of existing technology can be a challenge without the proper support. Enterprise-wide adoption is vital for leveraging the full potential of extended planning and analysis. While Power BI facilitates improved planning and analysis, xP&A only works when data integrity is an inherent part of your strategy.
Siyana Info Solutions helps your organization gradually evolve into a successful xP&A strategy. We help you develop a comprehensive vision for effective financial planning, forecasting, and budgeting and empower your team with an impactful strategy to help your organization grow. Contact us today to gain more insights into your operations and make improved business decision.