Teamwork and collaboration isn't just for sports teams and relationships. It is also super important at work and for financial analysis (FP&A) teams as well. Strategic financial decisions are not solely the responsibility of FP&A, every individual in the organization contributes to this process.
However, achieving sustainable long-term growth is nearly impossible without collaboration between departments. As a finance leader, you recognize the critical role that teamwork plays in establishing FP&A as a genuine business partner.
Nevertheless, isolated structures can obstruct the flow of information and processes, preventing effective interdepartmental collaboration. This situation ultimately limits your FP&A team's capabilities and wastes precious time.
How Collaborative FP&A Works
Collaboration is a great opportunity for the FP&A team to step up and play a bigger role beyond just reporting. It can influence how decisions are made in the organization. By working together with different departments, your team can tap into the unique skills and insights of colleagues.
Take the marketing team, for instance—they have valuable knowledge about market trends, customer preferences, and promotional tactics. By incorporating their insights into your financial models, you can improve sales forecasts and spot exciting growth opportunities.
You may wonder why is collaboration with FP&A so important.
Well, cross-functional collaboration—where different teams work together towards common goals—helps break down those pesky silos that can lead to poor decision-making. In FP&A, teaming up with finance and accounting means they can engage more strategically with their non-financial colleagues, boosting the overall financial understanding of the organization. Favorably, each team brings its unique perspective to the table. For example, the finance team looks at numbers differently than Marketing or Sales. When these diverse viewpoints come together, leaders get a clearer picture.
However as your organization grows, the structure can become compartmentalized, hindering the advancement of your FP&A team.
A study by Forrester and Airtable revealed that 46% of respondents indicated that divided business processes were negatively affecting or outright obstructing sound decision-making. In addition, 79% of participants reported substantial time losses due specifically to data silos.
These silos, whether they arise from processes or restricted data access, limit the availability of information and disrupt effective communication, leading to postponed decision-making and lost opportunities.
For instance, if your team struggles to access up-to-date sales information from the sales department, it could result in inaccurate financial forecasts and a reduced capacity to make informed strategic choices.
Who the Finance Team Should Work With?
According to IDC, it’s expected that two-thirds of employees in top-performing G2000 companies will be working in cross-functional teams by 2024. Organizations are getting creative with how they use cross-functional collaboration.
For example, you might bring together folks from marketing, sales, engineering, finance, and IT to launch a new SaaS product. Or, you could form a temporary team just to tackle a specific goal, like nailing a new business pitch. Sometimes, these teams even become a lasting part of how your organization operates
People might assume that having multiple people involved in FP&A complicates things and creates tensions due to different objectives. Phil Dodds, the Executive Director of Phocas and a seasoned CPA quickly pointed out how interconnected teams are in a business. "Every team has its own goals," he said. For example, sales managers are all about driving sales with exciting discounts and promotions, while production and supply chain managers are dealing with issues like raw material shortages and capacity limits.
Phil stressed that FP&A isn't just a finance department task; it impacts the whole organization. Whether you have a dedicated FP&A team or it’s part of broader finance roles, the finance function needs to mesh with the various goals of each department while keeping everything consistent and streamlined. He emphasized that successful FP&A depends on being able to adapt to market changes and outside factors.
Transform Your Workflow From Silos to Collaboration
Understanding the harmful effects of siloed structures on your FP&A team highlights the necessity of breaking down these barriers, but how?
Build a Unified Direction
To get a clear direction toward a common financial goal, cross-functional teams should create a shared vision centered on sustainable revenue growth through cost optimization and market saturation.
By breaking down this big vision into smaller, common goals, everyone can track progress and celebrate milestones together. For instance, setting a goal to cut operational costs by 15% in the next fiscal year encourages collaboration between the FP&A team and the operations department. They can spot cost-saving opportunities and keep an eye on reduction efforts.
Promote Seamless Communication Among Departments
When we set up open channels for communication, it boosts teamwork, reduces conflicts, and helps with decision-making.
For example, using collaborative software and hosting regular meetings across departments to chat about budget allocations with marketing and operations teams can help align financial resources with marketing initiatives and operational needs—maximizing ROI in the process. Plus, creating a shared space for different departments, whether they’re technical or business-focused, can increase productivity and foster transparency. In the end, these practices lift team morale and build confidence in the decisions we make!
Optimize Interdepartmental Teamwork
Using a shared planning platform for CEOs, CFOs, and financial analysts helps create honesty and teamwork within the organization. Also, having instant access to data and analytics makes discussions much more informed, shaping executive decisions that align with company goals.
By taking a holistic approach to decision-making – all parts of the business considered – leads to a solid financial strategy. This not only boosts the FP&A team's credibility and influence but also helps deliver insights that drive financial success and long-term planning. Involving all stakeholders can empower your team and ensure everyone is aligned with the organization’s objectives.
This can be achieved through open communication, cross-functional training sessions, and sharing knowledge across departments. This way, everyone gets a better understanding of cost drivers, inventory management, and supplier relationships.
Cultivate a Respectful and Accountable Work Culture
Accountability and mutual respect are key to great collaboration and financial success. When team members own their actions, it builds trust and transparency within the FP&A team. When everyone shows mutual respect, it creates a positive workplace where every contribution counts.
Setting clear performance expectations and keeping the feedback flowing helps everyone stay responsible and motivated to provide accurate and timely financial analyses. Regular check-ins and recognizing achievements help reinforce this culture. By being a role model for accountability, you encourage others to follow suit.