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“It’s important that you can pivot very quickly on your forecast, and you can make it dynamic.”
“It’s important that you can pivot very quickly on your forecast, and you can make it dynamic,” emphasized Heacock. “You need to have a software tool, versus just a spreadsheet where there could be a lot of mistakes and errors.”
“Many FP&A departments end up forecasting through spreadsheets, and that’s where you’re at a significant disadvantage,” Schulz pointed out. “That is additional lag time, when you’re talking about doing refreshes, because you’re having to aggregate information from disconnected sources. Try to bring together a solution that’s automated, quick to refresh, connected to the other systems in your tech stack. Ultimately, that’s where you really start to get an advantage.”
Dynamic solutions for FP&A don’t have to be part of a large enterprise investment. “Often, people immediately think of these large enterprise solutions,” Schulz said. “I’m not necessarily talking about a robust enterprise-wide build out — there’s a whole suite of SaaS offerings out there to enable more automated solutions. These are FP&A tools where a company doesn’t need to have a significant implementation, but it gets them moving out of that spreadsheet FP&A drudgery.”
“Ultimately, it’s not necessarily the biggest and most known solution — it’s the one that scales with your organization appropriately,” Schulz added. “You have to look at the implementation time, the training requirements, and how much of a lift it is to actually use it and make it be functional. For mid-market tech companies, it’s important to really assess the tool based on your scale and where you see yourself growing eventually.”
“It’s really important to nail down the requirements — which is not entirely an IT function, it’s also a business function,” Heacock said. “You need to understand the current and future strategy of the company, to make sure you set it up appropriately. What type of reporting and information do you need, to manage the business? What does the business structure look like? What are the segments? When selecting software, it’s important to select the best fit based on requirements that will work “now” and in the future based on the growth strategy.”
The wrong solution can wind up being no solution at all. “I’ve seen it a lot of times — if you don’t set it up well, people tend to go back to the spreadsheets,” Heacock said.
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