Video: How FP&A teams are linked to the business

Video transcript:

The role of FP&A has changed over the last few years in that we’ve become truly an adviser to the business. We are the heavy lifters of the numbers and the metrics and any other things like that that involve more data analytics, which then allows them to make better decisions on how they are going to approach their business. So if you are looking at in an arena like supply chain, we are given the data of here is what it takes, here is the days lag it takes to get product to market so that they can make changes in the supply chain that make it more efficient.

The FP&A teams at Kellogg’s are really married and really into the business themselves. It’s not a scenario where FP&A sits off by itself and has to interact. They are really integrated together so that that interaction is constantly there in that they feel part of the business not just an adviser, almost like a consultant coming in and leaving, they are part of the business. And so with that they are the proof—having to prove themselves doesn’t become such a big of an issue because they are no different than the operations managers in some of the arenas. They all manage the business together as a leadership team.

When you can look at finance being a business partner, you really have to understand what the true end product and consumer need is. So when you look at what the organisation is trying to do, for example, like a supply-chain scenario or marketing and advertising: what’s the end product, what’s the end goal, and you have to look at it from a total company perspective. The end goal is to get the consumer to consume your product or purchase your services. And when that doesn’t all fit together, you have to take a step back and make sure that you are saying “no” to the right things, but also saying “yes” to the right things, being willing to take some of those risks. In some companies the risk aversion is—people are so scared to make a mistake that they let a lot of opportunities slip right through their fingers.

So being able to analyse risk and opportunity and make sure that you are taking good calculated risk with good information, that’s really where finance can come to the table and provide a lot of value.