A lot has changed when the COVID-19 pandemic hit the world--there is no question about that. Businesses and firms trod around the adjustments they need to adhere to left and right to keep their companies afloat.
All functions of businesses needed to be checked and most had to be overhauled to keep up with the ever-changing dynamics happening around the globe.
Among these are the changes that were faced in the financial planning and analysis function.
In a nutshell, Gartner defines financial planning and analysis, or FP&A, as a set of four activities supporting an organisation's financial health: planning and budgeting, integrated financial planning, management and performance reporting, and forecasting and modelling.
FP&A solutions are important as they boost the finance department's ability to manage performance by linking corporate strategy to execution.
But how can these corporate strategies be put into action when collaboration per se within the organisation’s people faces tremendous challenges and roadblocks as they are limited and bound by health protocols and restrictions?
“(The) pandemic had accelerated the use of technology to fill the gap of face-to-face collaboration,” said Kum Fai Chew, group head of accounting and FP&A at Vena Energy Pte Ltd.
Remote working of staff was orchestrated and created an unprecedented need for change. Chew said they had to make use of various collaborative tools such as Microsoft Teams to engage with different stakeholders.
Data in the cloud also aided Vena Energy’s FP&A team in analysing data remotely. “We have also accelerated the use of dashboards to share live data with the management team so that they can quickly address any problems,” he added.
On the other hand, visualisation tools and automated reporting largely contributed to the effectiveness of Jabil Sdn Bhd’s FP&A operations, said Leek Chew Tan, senior finance manager of Ops FP&A and Automation.
“Both technologies have been instrumental in eliminating repetitive tasks such as generating reports, cleaning data, (and) creating graphs and charts,” Tan said.
Technology’s magic touch
Anaplan, a tool that is used for corporate performance management, served as the main tool for Chew’s team in collating data both in the financial and non-financial areas. Chew believes this technology contributed significantly to the success of their FP&A operations.
Meanwhile, Tan said their accelerated digital transformation in Jabil strengthened their scenario analysis and modelling capabilities amid the pandemic.
“Throughout the pandemic, we have had to address several major events--from plant shutdowns to curb the spread of COVID-19 to material shortages to supply chain disruptions,” Tan recounted. “With digital transformation, we were able to reduce--through automation--repetitive tasks.”
Tan said technology allowed their FP&A team to address more recent global issues such as inflation, the Russia-Ukraine war, soaring energy costs, and geopolitical shifts, among others.
How the pandemic dictated changes in FP&A
Chew said that moving data to the cloud and creating more standardised dashboards for more proactive management actions are a few of the FP&A practices that were influenced by the COVID-19 situation.
In addition, streamlining budgeting processes and shortening the timeline to collate data for budget discussions were also affected during the pandemic. Chew recounted that they had to constantly look out for ways to standardise their reporting and offloading of reports to dashboards.
Meanwhile, for Tan, making quick and informed decisions using available financial data marked the most significant change to the FP&A function following the pandemic.
“Data that is obtainable everywhere--both within and beyond the company needed to be collected and curated promptly,” he said. This provides fact-based narratives and analysis that is easily understood and actionable by senior executives.
Challenges in 2022
Chew and Tan recounted the challenges they went through in 2022.
Chew noted that they mitigated the risks around the weakening of Asian currencies against the US dollar in 2022 through hedging strategies.
Apart from these, Vena Energy’s budget timelines were disrupted in 2022 as travel only resumed in the second half of the year. Setting up meetings and discussions has been difficult, and they had to streamline budgeting processes further to address arising issues quickly.
On the other hand, on-demand requests from multiple functions, budgeting and forecasting accuracy, as well as lack of business insight are among the challenges faced by Jabil in 2022.
Jabil's Tan explained that they made use of available technology such as visualisation tools and automated reports in dealing with on-demand requests from multiple functions. On top of this, their team also encouraged the adoption of self-service tools to further enable users to perform data analytics based on their needs.
Jabil leveraged available analytic tools in ensuring data accuracy as well, with various checkpoints for additional validation even in report reviews before they finalise the forecasts to be used by the management.
Tan said they provided a single source system for insightful commentary in the face of the challenges in business insight, which is critical in navigating around their organisation’s next action.
Jabil’s team also continued informing and educating the regional and site FP&A groups so they could effectively articulate and link business and operations performance, along with finance findings.
A lesson amid the pandemic
During the pandemic, Chew learned the importance of constantly getting engaged with the team, especially when they were away from the office. He said that they had a standard daily morning meeting to discuss issues and align the team’s focus for the rest of the day.
As for Tan, he said that they learned the importance of making data-based decisions in the face of uncertainties and dynamic markets.
“Add the ability to generate real-time data, and the FP&A can be a powerhouse in the organisation’s strategic finance planning,” Tan said, adding that this helps leadership to stay on track with its financial commitments and goals.
Moving forward post-pandemic
In dealing with the FP&A function in 2023, Chew believes that one must adopt and have an outside view. “FP&A should always be ahead of the curve and work closely with business to identify any forthcoming challenges.”
Meanwhile, Tan advised adopting a business partner mindset in facing tasks within the function as this reinforces their role as a value creator.
He also noted the importance of developing skills to influence decision-making, as well as embracing technology to empower the team.
“Whether it’s automation, visualisation, cloud solutions, robotics process automation, machine learning, or artificial intelligence--ensure that tech is a part of your toolkit for more predictive and agile FP&A.”
Leek Chew Tan
This, in turn, will help the business to be more responsive to changing economic conditions and harness new opportunities quickly.
* Editor’s note: Jabil Sdn Bhd is the winner of the FutureCFO Excellence Awards 2023 in the category of Financial Planning & Analysis. Vena Energy is a finalist in the same category.
* Editor's note: FutureCFO is inviting submissions to the annual FutureCFO 2024 Excellence Awards. Click here for more information.
