Why xP&A is the key to financial success in construction

It’s no secret that financial planning and analysis (FP&A) is paramount to an organization's financial health. It’s the budgeting, planning, and forecasting model that allows the finance team to link financial strategy with execution. For the longest time, FP&A has been siloed in the finance team who are working in massive spreadsheets, relying on other teams to send timely departmental reports, and restricted by offline FP&A solutions.

However, a recent Gartner report shows that if FP&A processes are moved to the cloud—allowing for greater and more timely collaboration among teams—companies can work smarter and faster. By being on the cloud, the finance department is no longer siloed and can be proactive with information rather than reactive. When companies begin to work this way, Gartner calls it extended planning and analysis, or xP&A.

What is xP&A?

xP&A is traditional FP&A with a focus on working with a cross-departmental and collaborative methodology. Working within the xP&A model takes into account the fact that the finance department needs to run scenarios in a collaborative, connected, and timely manner. It also needs integrated, cloud-based technology to work.

By connecting the finance team directly to other teams and data sets, they will be able to make higher-quality forecasts and decisions.

Make the move to xP&A

There are three main stages when adopting the xP&A methodology.

1. Identify gaps:
   This is the most important step. What is the current FP&A methodology? What training do teams need and can current systems be centralized or is new technology needed?
2. Go digital:
   Time to upgrade! To start working in a truly collaborative way, the company must embrace a holistic approach, starting with all systems needing to be on the cloud. That way everything is centralized and each team can use/read the same data points, and forecast using the same information.
3. Embrace collaboration:
   No more team silos. Collaborative work means all teams have access to the information they need. It also ensures everyone is working towards the same goals and fully understands the direction the business is moving in.

xP&A in Construction

Why talk about xP&A with a construction lens? Because it’s an essential move the industry must make. Projects and plans, jobs and details will only continue to get more complex as technology impacts not just how the numbers are crunched but how people are hired, how the build will affect the environment, and how the work is done. With so many factors up in the air, financial professionals and project managers need to have direct lines and shared data with one another to keep driving the company forward.

When teams embrace xP&A they can move from an iterative, stagnant work style to a dynamic, integrated, predictive, and transformational one. It allows teams to respond to blockers and potential problems in a timely manner, potentially avoiding losses due to slow information dissemination. The xP&A model can improve accuracy and timeliness, but it is important to prioritize people over technology. Keep communication and training open in teams as data is only as good as the people inputting it. 

Briq can help your business achieve xP&A with our financial automation platform. Set up a demo to learn more.