The ‘Ultimate Question’ for FP&A

Malcolm Brock
Managing Director Brovanture


Watching the launch of the SpaceX Falcon Heavy rocket got me thinking. Well, the part that revealed Elon Musk’s Tesla Sports car with the iconic words ‘Don’t Panic’ on the sat nav. It brought back memories of listening to Douglas Adams’s famous story, ‘The Hitchhikers Guide to the Galaxy’ on BBC Radio 4 back in the 1970s.  One of the key aspects of the story is the calculation of – The Ultimate Question of Life, the Universe, and Everything. This got me to thinking about ultimate, or really important, questions in business. By the way the answer to these is unlikely to be 42!  Check out Wikipedia here to understand this if you are not familiar with the story.

So, to FP&A, Planning, Budgeting and Forecasting and the ‘ultimate question’. In my experience it has to be – What if? I am sure you have asked, or been asked, this on many occasions. What if?

  • Sales increase by 10%
  • The exchange rate falls by 5%
  • We put prices up / down by X%
  • Competitor Y launches their new product a quarter early
  • Manufacturing ships late
  • Development is late with the product update

I could carry on ad infinitum, but I am sure you get the point.

The sad fact is, for many FP&A departments when this happens they actually go into panicmode. They have to throw additional staff and long hours at getting to the answer due to the processes and technology they use. In addition, when they get to the answer it may as well be 42, as there is little transparency into how they got it and huge risks that errors are buried in the process and calculations. The reason is the use of spreadsheets, manual ‘out of system’ calculations or ‘black box’ legacy systems. At this point senior management should be panicking too!

Then it gets worse, because very often the result generates one, or more, additional ‘what if’ questions!

The answer to dealing quickly, efficiently and transparently with all these ‘what if’ questions has to lie in the application of more modern techniques and technology. The good news is this does not have to be either difficult or costly. The latest available, cloud based, forecasting systems deliver exceptional processing power and modern techniques like rolling forecasts, statistical modelling and driver-based forecasting. With these solutions answering the ultimate, what if, question becomes much simpler and quicker.

In my last post I discussed our customer Maxxium UK who have taken this approach and now take POS data from some of the UK’s leading supermarkets on a weekly basis. As a result, they can view key customer metric information and plans and answer not only their own, but also their customers’ ‘what if’ questions to improve the way they work together.

If you would like to better answer your ‘what if’ questions and improve the way you work with colleagues and customers, we would love to have a conversation with you about how we can help. As the 1st Oracle Fully Certified Cloud Excellence implementer (CEI) for EPM Enterprise Planning and Budgeting in the UK & IRL, Brovanture is pleased to be at the forefront delivering modern planning, budgeting and forecasting to a wide range of commercial and public sector organisations.