5 min read

Better separate: Why forward-looking strategic planning and backward-facing financial close and consolidation cannot be one and the same

Ray Curbelo

Global Head, Finance Solutions

Should one solution deliver both FP&A and FCC? Not if the goal is transformative insights and new business value.

You want a powerful planning solution to connect and transform the business. Can it do financial close and consolidation, too?

Growth-minded CFOs look to new technologies for help transforming and modernizing the business. In a world where efficiencies have been wrung out of most systems long ago, one area where businesses can still discover caches of untapped value is in improving the planning and decision-making processes. Advanced planning capabilities can reveal ways to accelerate revenue, optimize assets, expand margins, and manage risks.

When researching a new planning platform, you may find that some solution providers offer financial planning and analysis (FP&A) capabilities bundled together with financial close and consolidation (FCC). What are the benefits and drawbacks of opting for a single tool that does both?

When saving money leaves a great deal of business value on the table

FP&A and FCC are both important finance functions essential to the business. It seems reasonable to handle them with one solution, as they’re both under the umbrella of finance. If you can save time and money upgrading both at once, even better. However, there are important tradeoffs.

The dilemma is that these two functions are fundamentally different, with different input, processes, and objectives. Planning is a dynamic, forward-looking process that succeeds best when it’s open to change. Consolidation, on the other hand, is a backward-looking function that takes well-defined input, follows a clear set of rules, and produces a specific output. Although they can be handled to a certain extent by one tool, doing so means compromising on one set of priorities or another. You’ll either have a strictly technical, rules-based engine designed to do consolidation or a very flexible, adaptable, open engine designed to facilitate a planning process.

With both on one platform, planning is constrained by a rules-based engine that’s not designed to be flexible. When your ability to plan and forecast derives its structure from your chart of accounts and accounting imperatives, your planning capabilities will be limited by that architecture. The lack of flexibility limits the way you can look at and think about your business. Sometimes, a new tool can do more with less. Other times, what looks like a shortcut or a way to save is actually a setback. In this case, trying to accomplish both FP&A and FCC in one space undermines the value that advanced planning capabilities can deliver.

Making siloed improvements versus driving transformative change

For some organizations, the goal is to make tactical, siloed improvements to the finance function. When that’s the case, an FCC solution that includes financial planning add-ons may make sense. However, this approach leaves a great deal of business value on the table.

Simply upgrading existing FP&A and FCC capabilities is unlikely to deliver the transformative change that growth CFOs are looking for. Two-in-one finance tools maintain the silo of finance data and planning. They aren’t designed to bring the broader enterprise and its myriad data streams together. Without the purpose-built architecture and capabilities necessary to connect various systems and business functions, this approach can only generate insights from within the finance sphere. It maintains the limitations of the status quo while impeding more ambitious modernization. To bring different areas of the business together later, you’ll need to create a more flexible foundation.

Anaplan delivers new lines of sight with a purpose-built planning solution

If the goal is business transformation, the best strategy is to keep financial planning and consolidation separate. There are many tools designed to do a great job on close and consolidation. With that function taken care of separately, you can turn your attention to exploring the full potential of advanced planning capabilities.

Anaplan gives your business a platform specifically designed to enable advanced planning and analysis. Its flexibility allows you to bring the breadth of relevant data and considerations into the platform and work with it in the ways that best suit your particular business. The result is a fresh perspective on how your business works and revelatory new insights on how it can work better.

Drive agility with a more current and complete view of the business

How you make money is unique to your business and industry. Anaplan gives you the flexibility to look at your business, analyze it, and derive insights based on the factors that make your business successful. This takes you far beyond the lens of standardized accounting structures. Anaplan can expand to encompass partners, manufacturers, and suppliers; all of the various ways your products and services reach your markets; sales, marketing, HR, and other business functions; and whatever other continuously changing inputs and considerations impact your business.

Flexibility and inclusiveness is part of what enables Anaplan’s advanced “what-if” scenario planning. When you have the freedom to ask questions and explore various scenarios and their ripple effects in detail, you can make richly informed decisions more quickly. Better, faster decisions enable the business to be more agile, adaptable, and resilient.

Connect siloed information to discover new paths to business value

Transformative insights reside in information that’s tucked away in specialized systems and spreadsheets across the enterprise. Anaplan brings plans and data together, revealing opportunities to grow sales, cut costs, and improve cash flow. Access to a central source of data shortens planning cycles and makes forecasts increasingly accurate, so you have a better idea of what’s ahead.

Even if your current goals are focused on finance, Anaplan lays the foundation for a connected future where seamless cross-functional planning and collaboration can illuminate new paths to business value. It’s a major step toward ongoing business modernization and transformation, not a roadblock to it.

Today’s finance leaders are aiming for more than back-office efficiency. They want to engage with other areas of the business to drive growth and improve agility. If finance is to stretch beyond accounting and compliance, it must bridge gaps with the revenue-generating aspects of the business. That’s what Anaplan means by better together, and it’s what only Anaplan can deliver.

Find out what powerful, flexible planning capabilities could do for your business.

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