The Financial Planning and Analysis (FP&A) team is an important part of any organization. As it is responsible for driving up the value of the corporation, its role is undeniably important in an organization.
These teams have the skills, methodology as well as access to the technology that help them make well-analyzed decisions for their which can make the strategy implementation a successful endeavor.
As they are trusted with the responsibility of reliable, accurate, and timely reports and dashboards, they provide business insight to understand the volatility and risks associated with strategy implementation.
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Common Factors of Strategy Failures
The term “Strategy Implementation” denotes the process of executing the strategy and setting strategic initiatives into action to achieve business objectives with the help of a well structured proven approach.
A report published by Fortune Magazine a few years ago outlined that, on average, nine out of ten organizations fail to successfully implement strategies for various reasons that include:
- Around 60% of companies ignore establishing links between strategy and budget
- 75% of organizations don’t link strategies to the employee incentives
- 86% of companies spend less than one hour to conduct performance management reviews with executives and related teams to assess progress made
- 95% of organizations fail to communicate and educate staff about the strategy that they are implementing
For successful strategy implementation, it is necessary to allocate the right amount of resources in strategy building and executing the plans within budget and timeframe.
However, in reality, companies fail to put strategies in action as they ignore some or all the above steps.
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Strategy Misconceptions
There are some basic facts that a company and its staff need to know:
- Strategy development is about what and why, and strategy implementation addresses the how and when.
- Strategy implementation is the process that executes the strategies to realize the financial and non-financial goals such as revenue and customer satisfaction.
- Developing a strategy is necessary. But strategy implementation is more important to achieve business objectives
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How FP&A Can Help in Strategy Implementation?
The challenge that most organizations face is not about developing good strategies, it is using the relevant steps to implementing operational plans.
The Financial Planning and Analysis (FP&A) team can facilitate, coordinate with the Strategy Management Office (SMO) and the various functions in the organization the roll-out of the implementation plan such as:
- Aligning strategies with long-, medium-, and short-term budgets
- Facilitating department-specific annual plans around the strategy implementation plan
- Designing a practical tracking and monitoring of respective budgets with relationship to corporate performance with the help of scorecards
- Coordinating the development of performance management and reward system for employees
- Generating timely financial reports for monitoring the performance and progress of each function
- Contributing to performance management meetings for the status of implementation, forecast, analysis, and financial simulation modeling
The FP&A team is key to the successful implementation of strategies as it is integral to planning, monitoring, and providing insights related to the successful execution of strategies.
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