On more than one occasion I have heard leaders express in an exasperated tone the fact that they suddenly (as opposed to strategically) in need of an FP&A person (which then evolves into a team and then systems, etc. see blog post on systems here).
The timing of this typically happens at the following business junctures: the business is still figuring out how to close the books, the business knows how to close the books and is ready to mature into formal process, you are getting the numbers but still cannot tell how you are doing or the business takes a dive. In all cases, having FP&A as a function in your organization is crucial for effective decision making but it does not necessarily mean you need a whole department and the inevitable systems.
Most often the assessment of whether you need FP&A is a function of multiple things:
- your growth strategy
- your exit strategy
- your existing talent
- your existing processes
Notice that systems are not on the list. Given that most FP&A worth its salt lives in Excel, a systems evaluation and investment would be last on the list. If you have strong people and process, you can make do without systems (for a while anyway).
Often, it is worthwhile to look at those elements first before proclaiming that you need an FP&A person/team. Sometimes, it is worth the money to have an initial assessment completed first and then based on those findings proceed forward.
For small to medium sized businesses such an assessment can take from a few weeks to a quarter. For large, highly complex organizations, it is likely a much longer research project.
Nevertheless, it is something to consider. If you are interested in exploring this type of assessment I can be reached via my blog contact information.