In 2020, Gartner coined a new term to describe a broader definition of financial planning and performance management using the term “extended planning and analysis (xP&A).”
According to Gartner, by 2024, 70% of new financial planning and analysis projects will become extended planning and analysis (xP&A) projects, extending their scope beyond the finance domain into other areas of enterprise planning and analysis.
xP&A involves looking at more varied types of data to allow for greater visibility into operations and better organizational decisions.
What exactly is xP&A?
Put simply, xP&A aims to extend FP&A principles beyond the finance department to any and all areas of the organization that produce business plans. This could for example include sales, marketing, and HR.
Extended planning and analysis joins the planning components of other business domains, going beyond simply integrated financial planning, such as workforce, operations and sales performance, or any other area of an organization that develops plans. xP&A enables finance professionals to consolidate forecasts and metrics from across the organization, which can be integrated into a holistic view of the business. It integrates the operational and financial components of such domains into a single integrated solution.
The main difference between traditional FP&A and xP&A is in the amount, and range, of data that goes into your analysis, and how your analysis links to the company’s business goals, said Gregory Panik, vice president of FP&A at global engineering company CTDI.
In embracing xP&A, users will have to embrace a new vision for FP&A.
In its 2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions, it was noted by Gartner that “by 2024, Gartner expects FP&A to evolve to encompass xP&A, a strategy where the “x” denotes breaking down traditional silos between enterprise financial and operational planning processes in order to deliver new levels of transformative business value. The “x” represents consistent and continuous planning that extends beyond the finance domain into other areas of enterprise planning and analysis.”
The end goal of xP&A is to place FP&A front and center, and will extend it’s current role by giving it a more prominent and leading role in driving agile, continuous company-wide planning. With xP&A, the finance organization has the opportunity to become true business partners with the rest of the enterprise.
FP&A vendors evolving toward xP&A will rapidly increase the accessibility and flexibility of current data integration and data management functions.
The broader vision of xP&A is to create an organization where all functions have the potential to be engaged in some form of planning aligned to common goals based on a single version of the truth. Unfortunately, the ability to use cloud FP&A beyond the boundaries of the finance organization in a manner encompassing this broader vision still remains elusive for most organizations. However with tools such as DataRails, it doesn’t have to be.
Eliminate data silos and consolidate with a click.
DataRails allows for extended planning and analysis by connecting data from your various organizational systems (ERP, GL, CRM, disparate spreadsheets, etc). With DataRails, you can access all your organizational data, including HR or Sales data, within Excel or within the Insights feature. The solution makes all your cross-organizational data available at your fingertips.
DataRails allows you to capitalize on all of your organizational data by bringing it all together to understand the financial health of your business.
