Strategic financial decisions don’t just fall on the shoulders of financial planning & analysis (FP&A) teams — everyone across the business has an important role to play.
But, fostering your organization’s long-term growth becomes nearly impossible without strong cross-departmental collaboration.
At Planful, we wanted to know what sets high-performing teams apart. To find out, we partnered with CFO Dive and Industry Dive to survey 150 finance leaders across various industries in the United Kingdom and the United States.
In this article, you’ll read a snapshot of our survey results, highlighting significant barriers to proper collaboration and their impact on the workplace. Plus, you’ll learn how your financial planning team can tackle these challenges to create a truly effective FP&A function that supports your organization’s long-term goals.
Cross-functional collaboration, or interdepartmental collaboration, is a process that allows teams or departments from across an organization to partner together toward common goals.
This method of collaboration is particularly useful for breaking down silos that can lead to poor decision-making. Within FP&A specifically, cross-functional collaboration allows finance and accounting teams to work more strategically with their non-finance counterparts — boosting the entire organization’s financial IQ.
“When it comes to collaboration, it all comes down to precise coordination,” says Justin Merritt, Vice President of Product Management at Planful. “You must make sure all the different areas of the business align with strategic decisions.”
This alignment is a good thing, especially when you consider how each team approaches company goals differently.
Your finance team thinks about numbers in a vastly different way than Marketing or Sales. When these perspectives come together, it gives leaders more context to make fully informed decisions.
Considering the importance of cross-functional teamwork, our survey revealed a surprising find: 55% of respondents believe their FP&A teams are currently too siloed from the rest of their organization, inhibiting FP&A collaboration.
We dug a little deeper to learn why this siloing is happening and what major factors contribute to the feeling of isolation for FP&A teams, which include:
Clearly, many teams are feeling the pain of a lack of transparency regarding day-to-day operations. Your finance and accounting colleagues want to know who is responsible for what.
Transparent, efficient communication and clear-cut roles are essential to the proper functioning of any team. In the next section, we’ll walk you through our tactics to establish this level of clarity.
As we mentioned above, finance and accounting team members want more effective communication and clearly defined roles and responsibilities. This helps them collaborate well with non-finance colleagues and allows them to do their best work, which benefits the organization in the long run.
It takes some elbow grease to improve transparency and boost collaboration. Our survey asked respondents what they were doing to build an agile and collaborative FP&A function.
We found three tips from their responses to help you improve collaborative processes. Spoiler alert: It involves taking a good look at your existing tech stack.
As we’ve said in the past, the most effective FP&A teams invest in cloud-based financial performance management (FPM) technology to optimize their workflows, including data preparation.
FPMs provide finance and accounting teams with a single source of truth to house financial data. This allows finance to safeguard financial information while non-finance budget managers can track their team’s performance and monitor spend.
An FPM solution also provides immediate access to trustworthy and accurate data. According to our survey, a whopping 94% of respondents trust their financial technology to provide accurate views into the health of their business and to drive strategic financial decision-making.
These platforms can also double as collaboration tools, allowing non-finance users the ability to work with FP&A to analyze important financial data for their team. The result is an agile FP&A function that can work with non-finance teams to adjust budgets when a change is needed or if market conditions shift.
Of the reasons to invest in financial technology, 43% of respondents to our survey cited advances in automation as the top benefit.
Artificial intelligence (AI) and machine learning (ML) are positively changing the way FP&A functions by lifting the burden off of overworked teams so that they can think creatively to help their organizations grow.
Some financial planning tools now offer AI functionality that can spot anomalies in data sets no matter how large.
Planful’s suite of AI-powered financial solutions, Predict, is designed to act like a financial assistant to quickly analyze your historical data, allowing you to run scenarios and make more informed forecasts.
One of the big fears around AI is that it will replace the need for human workers within existing financial workflows.
We’ve found that AI can’t replace the human element — financial and accounting processes still require a human hand to make strategic decisions and optimize business growth. Instead, AI provides FP&A leaders with a gut check to ensure their organizations are on the right track. It also helps create efficiencies and gives the finance teams valuable time back for more strategic work.
Partnering with colleagues in other departments is a significant way to improve communication and combat team confusion.
Take the relationship between the CFO and CMO, for example. These two executive leadership team (ELT) members work toward the same goal — the organization’s strategic growth — but how they each form goals and discuss outcomes sounds completely different.
Consider a marketing budget. The finance team will think about that budget using terms like GL code or allocated costs. The marketing team thinks more about campaigns, traffic, or leads.
One way to improve cross-functional relationships is to invite key stakeholders outside the finance team to weigh in on goals.
Working together on shared KPIs fosters conversation between both parties. It encourages a mutual understanding: Finance learns about marketing’s priorities, and marketing can talk about success in a way that finance can more easily understand. Even more, strong inter-departmental relationships promote a sense of ownership of the outcomes for both teams.
Modern financial performance management platforms have the power to automate manual tasks and reduce repetitive work for FP&A teams.
“Engaging everyone with the data — like through a real-time dashboard — can help entire organizations see how decisions impact their company’s financial performance,” says Justin.
We recommend companies use FPM like Planful to automate more basic FP&A tasks, like data collection and integration. Once that process is successfully automated, consider using automation to solve problems in important areas like cash flow forecasting, reporting, auditing, consolidation, and more.
What’s mission-critical is simply getting started so your company doesn’t fall behind.
Our report, “Priorities to Remove Silos and Close Gaps in Strategic Analysis,” gives FP&A leaders tactics to use effective cross-functional collaboration backed by our research.
Are you ready to transform your FP&A function? Download the report to get started.