An over reliance on manual modeling is wasting analysts' valuable time. Worse, it’s keeping your finance team from providing strategic insights to the business that are desperately needed. Adding headcount isn’t an instant fix – especially if the analysts you hire are still in the modeling mindset. To mature as a strategic finance team, you’ll have to reconsider the skills you need on your team moving forward.
Our VP of Product Management, Nate Skelton, drew from his finance experience with Workday Adaptive Planning and PopSugar to write a tough-love article explaining the top challenges with FP&A modeling and why financial analysts should reconsider where they expend their energy: Embrace the Future: Why Financial Modeling Skills Don't Define the Value of Analysts Anymore.
“It's time to recognize that an analyst’s value is no longer defined solely by financial modeling wizardry.”
Here’s a snapshot of his top 5 reasons why you need to reassess how you allocate FP&A time and develop your team of analysts.
- Your Analysts are Always Crunched for Time
Adding strategic value to the business through operational + financial insights takes time. So does modeling. If you want to get to the next level, something’s gotta give.
- Modeling is Holding Them Back
Yes, it’s how things have always been done. But complex spreadsheet-based models have their limitations. Even your most experienced analyst will miss a formula error. And there’s often a bottleneck when business partners request a new forecast. There’s no easy way for them to share their CRM or HRIS data, so important tasks like headcount reconciliation take much longer than they need to.
“I was always fearful that an inconsistent assumption or hidden formula error in my work would lead to a flawed decision.”
- Next-Generation Tools Have Arrived
Modern FP&A SaaS platforms like Stratify are revolutionizing financial planning by replacing bespoke models with highly configurable, cloud-based models that all stakeholders can contribute to.
“Many analysts take pride in the sophistication of the models they’ve built, so trusting the business logic in a SaaS platform can seem radical or suspect. But hear me out.”
Nate explains that he longed for these capabilities after spending so much time on lower-value activities in previous analyst roles.
As the finance leader, these tools are well worth your consideration. Your financial plans are only as good as your data, and your business needs plans to be informed by accurate data from stakeholders themselves.
- You Have to Make Strategic Hiring Decisions
Your analysts may love providing complex spreadsheets. But there are better opportunities for their professional development if they are willing to branch out and grow their operational knowledge and collaborative relationships with other business partners.
“If a CFO can purchase software that can replace your spreadsheets, and instead employ analysts who are financial educators who can interpret the numbers and guide the business…your current role may be on the sunset list.”
In fact, according to a study conducted by FP&A Trends, there has been a substantial increase in organizations seeking expertise in business partnering.
- There’s So Much to be Gained
The future of FP&A is focused on new frontiers of data-driven storytelling, problem-solving, and integrated stakeholder planning. Leverage your big-picture view of trends and produce new models with agility that isn’t possible in the old reality of siloed data and reliance on spreadsheets.
“The new definition of success also includes understanding business dynamics and industry trends.”
Don’t get us wrong – modeling will always be a core skill your financial analysts should possess.
But as Nate explains, they’re also desperate to reclaim the long days and weekends of building new scenarios and hunting down formula errors. As the finance leader, you can equip and encourage them to gain these new and valuable analyst skills.
Read Nate’s full article HERE, with more practical advice for future-proofing FP&A teams.
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