# Here’s what the future holds for financial planning & analysis teams Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-03-15 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: The Future of FP&A: Cost Management and Agility in 2021 Meta Description: Discover the essential shifts in FP&A for 2021, from scrutinising fixed costs to replacing legacy systems. Learn how agility remains key for success. URL: https://financedigest.com/heres-what-the-future-holds-for-financial-planning-analysis-teamshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/just-1-1736838529066-compressed.jpg) _By **Thomas Sutter,** Finance Centre of Excellence, Oracle NetSuite_ Effective financial planning and analysis (FP&A) capabilities are essential to the finance function and the success of the organisation it serves. This was especially true in 2020, with teams navigating one of the most unpredictable years on record. Thrust into the spotlight, organisations looked to CFOs and FP&A teams to provide rapid insights into forecasts, [operational performance](https://www.financedigest.com/how-business-owners-can-improve-their-operational-and-financial-performance-through-contactless-and-card-payments.html "How Business Owners can Improve their Operational and Financial Performance through Contactless and Card Payments") and data-driven answers to help make critical decisions. [Finance teams](https://www.financedigest.com/protecting-the-finance-team-from-burnout-to-drive-employee-retention.html "Protecting the finance team from burnout to drive employee retention") had to embrace agility, committing to constantly updating business scenarios, fixing future projections and creating multiple contingencies. With a new [year well](https://www.financedigest.com/why-well-look-back-on-2022-as-a-defining-year-for-fintech.html "Why we’ll look back on 2022 as a defining year for fintech") under way, have these requirements changed? **Fixed costs will once again be scrutinised** Fixed [costs don’t](https://www.financedigest.com/spiralling-azure-costs-dont-necessarily-mean-your-cloud-strategy-is-off-course.html "Spiralling Azure costs don’t necessarily mean your cloud strategy is off course") normally change from month to month. However, in a [market as dynamic](https://www.financedigest.com/the-automotive-interior-surface-lighting-market-dynamics-to-take-an-exponential-growth-turn.html "The Automotive Interior Surface Lighting Market Dynamics To Take An Exponential Growth Turn") as we have currently, businesses have to challenge this assumption. Last [year was when FP&A teams were forced to scrutinise every line](https://www.financedigest.com/ten-years-down-the-line-predicting-the-future-of-fs.html "Ten years down the line: predicting the future of FS") item. This scrutiny will continue and might just become more extreme by necessity throughout the rest of 2021. Organisations must turn a critical [eye towards](https://www.financedigest.com/smartphone-maker-xiaomi-switches-china-playbook-with-eye-toward-ev-showrooms.html "Smartphone maker Xiaomi switches China playbook with eye toward EV showrooms") costs, understanding what can be cut without potentially harming the long-term future of the company. Data and insights will be needed so that FP&A teams can continually monitor several categories, including payroll and benefits, outsourcing, [cost of operations](https://www.financedigest.com/uk-pub-operator-wetherspoons-loss-narrows-despite-higher-costs.html "UK pub operator Wetherspoon’s loss narrows despite higher costs"), supplier contract terms and culture expenses. Despite heightened cost management, organisations will [need to focus on the growth of the business](https://www.financedigest.com/uk-needs-to-make-politically-unpopular-reforms-to-boost-growth-business-group-says.html "UK needs to make politically unpopular reforms to boost growth, business group says"), all while keeping people motivated whilst they deal with increased workloads and fatigue. Every decision will need to have a long-lasting [positive impact](https://www.financedigest.com/broadcast-switchers-market-increasing-adoption-of-ip-live-production-technology-to-positively-impact-growth.html "Broadcast Switchers Market: Increasing Adoption of IP Live Production Technology to Positively Impact Growth") on the business while pursuing these cost reduction measures too. ![Thomas Sutter](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/photo-thomas-sutter-full-photo-450x526-1736838528799-compressed.jpg) Thomas Sutter **Legacy systems will be replaced** As CFOs seek to maintain and mitigate additional costs to their organisations, FP&A plays a critical role in maximising profitability, establishing operational efficiencies and uncovering [cost savings](https://www.financedigest.com/how-to-save-money-as-a-student-during-the-cost-of-living-crisis.html "How to Save Money as a Student During the Cost of Living Crisis"). To deliver these insights, [finance teams must challenge the existing mechanisms and systems](https://www.financedigest.com/from-fragmented-systems-to-unified-cpm-unicredit-prepares-for-todays-finance-challenges.html "FROM FRAGMENTED SYSTEMS TO UNIFIED CPM – UNICREDIT PREPARES FOR TODAY’S FINANCE CHALLENGES") by which they execute their planning and forecasting processes. FP&A teams cannot afford to be slowed down by old legacy systems. Spurred on by the shift to remote working, [businesses will seek](https://www.financedigest.com/businesses-seek-better-access-to-data-to-support-environmental-objectives-bright-data-research-reveals.html "Businesses seek better access to data to support environmental objectives, Bright Data Research Reveals") to enhance or eliminate systems that can’t keep up with the organisation’s priorities. Instead, new [technologies will be adopted to create](https://www.financedigest.com/grain-and-cereal-crop-market-novel-technological-solutions-will-create-lucrative-growth-opportunities.html "Grain And Cereal Crop Market : Novel Technological Solutions Will Create Lucrative Growth Opportunities") efficiencies. For example, cloud planning and budgeting [software solutions](https://www.financedigest.com/why-no-code-beats-custom-software-and-turnkey-solutions-for-business-automation.html "Why no-code beats custom software and turnkey solutions for business automation") are completely changing the way FP&A teams conduct their budgeting, planning and analysis. By simply eliminating the manual consolidation of budgets from disparate spreadsheets, [finance teams](https://www.financedigest.com/finance-teams-using-ai-outperform-peers-as-demand-for-skills-grows.html "Finance Teams Using AI Outperform Peers as Demand for Skills Grows") have more time for actual analysis. Cloud-based tools also provide remote access, which has quickly [taken on much greater importance over the past year](https://www.financedigest.com/how-has-growth-of-marine-scrubber-systems-market-taken-off-over-the-past-few-years.html "How has Growth of Marine Scrubber Systems Market Taken Off Over the Past Few Years"), as well as improved collaboration options. The [cloud is also making sophisticated planning tools accessible for mid-sized and fast-growing businesses](https://www.financedigest.com/workforce-management-the-next-cloud-resource-for-businesses.html "Workforce management; the next cloud resource for businesses?"). Bolstering planning capabilities can [unlock the value](https://www.financedigest.com/how-innovations-in-edge-computing-can-unlock-value-for-global-organisations.html "How innovations in edge computing can unlock value for global organisations") of financial forecasting and inform strategic decision making. **Agility will remain key** The [last 12 months](https://www.financedigest.com/monkeypox-emergency-could-last-months-with-window-closing-to-stop-spread-experts-say.html "Monkeypox emergency could last months, with window closing to stop spread, experts say") have shown how important agility is for growth, and businesses don’t want to be caught off guard again. FP&A [teams learned the importance of adjusting plans quickly and communicating insights to senior leadership](https://www.financedigest.com/zivver-expands-leadership-team-names-three-new-c-level-executives.html "Zivver Expands Leadership Team, Names Three New C-level Executives") early and often. With resources already stretched, teams will likely have to deliver more reports, meet business [needs](https://www.financedigest.com/do-small-businesses-need-branding.html "Do small businesses need branding?") and find the capacity to partner with business functions and provide insights throughout 2021. FP&A teams will [continue to enhance technological capabilities that allow organisations to reduce planning](https://www.financedigest.com/the-case-for-continuous-planning-in-a-world-turned-upside-down.html "The case for continuous planning in a world turned upside down") cycle times, improve forecast accuracy, deliver insights quickly and proactively plan. **Flexible and strong financial** [planning is key](https://www.financedigest.com/why-financial-planning-should-be-a-key-subject-at-school.html "Why financial planning should be a key subject at school") In any year, planning can be a complex process, but the volatility of 2020 forced FP&A teams to rethink the art of prediction and highlighted the importance of [mitigating risk](https://www.financedigest.com/new-isla-standards-provide-the-foundation-for-resource-optimisation-efficiency-and-risk-mitigation.html "New ISLA Standards Provide the Foundation for Resource Optimisation, Efficiency and Risk Mitigation") and creating a clear path forward. Organisations faced additional strains on their financial planning and [forecasting process last year](https://www.financedigest.com/global-automotive-brake-system-market-is-expected-to-witness-a-rise-of-3-cagr-between-the-forecast-years-of-2020-2030.html "Global Automotive Brake System Market is expected to witness a rise of 3% CAGR between the forecast years of 2020-2030"), which will continue in 2021. In the months ahead, the [world will continue to evolve](https://www.financedigest.com/the-evolving-world-of-work-what-next-for-employers.html "The Evolving World Of Work – What Next For Employers?") and businesses will expand probabilities and outcomes, using multiple modelling approaches to prepare and understand impacts throughout the organisation. There will be an increased focus on driver-based modelling and [planning teams will rely even more on external economic drivers](https://www.financedigest.com/uber-to-roll-out-pension-plans-for-uk-drivers.html "Uber to roll out pension plans for UK drivers"). **Is your FP&A team prepared?** It is clear the FP&A function can expect another [busy year](https://www.financedigest.com/nfts-live-streams-sustainable-businesses-and-social-shopping-what-to-prioritise-in-commerce-this-year.html "NFTs, live streams, sustainable businesses and social shopping – what to prioritise in commerce this year"). However, organisations can make their lives easier by ensuring they’re equipped with the right tools and technology to provide more strategic [value and practical insights for the business](https://www.financedigest.com/three-ways-data-unlocks-business-value-for-financial-organisations.html "Three Ways Data Unlocks Business Value for Financial Organisations "). With the right software in place, teams will have the capabilities to dig deeper into [data to yield insights that can be incredibly valuable for helping the business avoid](https://www.financedigest.com/the-race-to-avoid-data-dinosaur-extinction.html "THE RACE TO AVOID DATA DINOSAUR EXTINCTION") unnecessary risks. Interpreting [data in this way](https://www.financedigest.com/four-ways-data-and-ai-can-transform-financial-services.html "Four ways data and AI can transform Financial Services") will also guide future performance in the years to come. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---