Partnering for Data-Driven Financial Planning and Analysis

By Karl Hersch, Principal, Deloitte Consulting.

Chief information officers have vast responsibilities, many of which revolve around solving core information technology problems. But to reach those solutions, partnering with the business users is critical. Simply put, the IT department is a service organization for the rest of the company; without appropriate support and service levels from IT, the remainder of the organization suffers. But with the right input from business leaders, IT can help create competitive advantage.One of the departments most in need of IT support is finance, especially around financial planning and analysis (FP&A). A review of data use in financial planning and analysis provides an instructive look at how the CIO can collaborate with other organizational teams and build a solution that extends across the traditional silos where data often resides. If done correctly, IT can help build the proverbial bridge to connect different parts of the organization and the CIO has a critical role in supporting this function.

At the root of this challenge is information management, including managing the underlying data and implementing and maintaining the supporting technology. The CIO needs to understand the finance team's requirements around budgeting, planning, forecasting, scenario planning, measuring KPI's and analytics. The important thing here is determining what's critical for executives and business group leaders to run the business, manage P&L's and cost centers, and make informed decisions.

Once the CIO has determined that the data platform fits well with the organization's existing infrastructure, he or she should consider what the financial planning and analysis team actually needs to accomplish its goals. What data is necessary? Where does that data exist? How is that data gathered and rolled up to the team that utilizes, analyzes, measures and reports it? This bottoms-up approach must be planned in collaboration with the chief financial officer to ensure the information is useable.

Once the appropriate dialogue has taken place with organizational leaders, then the CIO can apply his or her knowledge and expertise helping drive the selection of the best tools and applications to execute the processes required. Which tools are selected for FP&A purposes should be driven by what the modeling and scenario planning requirements are, what the data inputs are, how the organization needs to report, and how the end results will be disseminated.

When talking about FP&A, the CIO must discuss how the CFO plans the budget, what data he uses to forecast, and how CFO will manage incoming demands on his or her constituencies. And let's not forget that the finance group is a service organization within the company as well, so this solution should be customized to the needs of the company as well as the group.

If the CIO takes that client service view, and focuses on the needs of the end-user and lets those requirements drive the information management and technology decisions, the results are far better. Success here is evidenced by a jointly driven analysis - finance and technology teaming together. And it is in that environment, where the technology is viewed as a catalyst for out-of-the-box thinking, that real change can be accomplished.The CIO needs to understand the finance team's requirements around budgeting, planning, forecasting, scenario planning, measuring KPI's and analytics. The important thing here is determining what's critical for executives and business group leaders to run the business, manage P&L's and cost centers, and make informed decisions.