Extended planning and analysis overview

As the name suggests, extended planning and analysis (xP&A) goes beyond the boundaries of traditional financial planning and analysis (FP&A). Here, the “x” is not a variable that stands for any one department, such as sales, supply chain, or HR. Rather, it denotes the breaking down of silos between finance and every other department—and the ability to connect and synchronise plans in real time across the entire organisation.

xP&A meaning and definition

xP&A is a planning approach that takes the best financial planning and analysis (FP&A) capabilities—such as continuous planning, forecasting, advanced analytics, and performance monitoring—and extends them across the enterprise. xP&A goes a step further, however. It considers other metrics that do not appear on a financial statement—such as operational readiness, customer satisfaction, employee engagement, churn, and customer acquisition.

Explore the concept of extended planning and analysis (xP&A) and see how it can provide you with comprehensive enterprise planning across your entire organisation.

From FP&A to xP&A: What it means and why it matters

Increasingly, financial planning professionals are expected to take the lead on business strategy and to anticipate future developments. Businesses need to pivot quickly and respond to risk and opportunity with speed and accuracy. To deliver the data-driven insights and actionable analysis that are needed today, FP&A leaders need to look beyond the financial reports alone, to gather a more holistic view of the organisation’s performance.

Connected enterprise planning and the end of silos

Sales, marketing, HR, procurement, and supply chain all contribute to the bottom line—and they all create their own operational plans. For example:

• The sales team develops plans to meet their targets
• Marketing creates plans for campaigns, promotions, and product launches
• HR develops plans to meet future workforce requirements
• Procurement plans what to purchase, from which source, and when
• IT creates projects based on their strategic alignment, benefits, costs, and resource availability
• Supply chain teams create demand-based plans for production, stock, and more

Traditionally, all these plans are created in silos, in separate planning tools and standalone spreadsheets—without insight into how they may affect each other. For example, if sales exceed their targets, will production be ready? Will the right staff be in place?

Linking plans to identify the potential impacts within different departments is at the core of xP&A. It enables businesses to respond swiftly when a marketing product launch is successful, or there is a supply chain disruption, or a sudden change in staffing requirements. When one plan changes, all the others adapt—and the ship can stay on course.

But of course, xP&A doesn’t just link operational plans to each other—it also links them to financial goals and strategic objectives. This helps CFOs and their teams to forecast, monitor, and evaluate matters holistically—and excel in their role as strategic adviser to the business. Even though FP&A capabilities are extended to different departments with xP&A, finance teams are still at the helm and perfectly positioned to orchestrate extended planning across the business.

For example, to address potential supply chain disruptions, executives are able to rapidly run simulations of demand, supply and financial changes with agile integrated supply chain planning software and to support what-if analysis, and compare planning scenarios for fast and informed decisions across the business.

Key benefits of extended planning and analysis

Extended planning and analysis gives organisations the power to work as one well-oiled machine. Five of the main benefits include:

1. Real-time, holistic business visibility. xP&A breaks down departmental silos and creates a single view of plans and performance in real time. Business leaders can use this view, along with cross-functional reporting and analysis tools, to understand the impact of decisions on each department—and on the organisation as a whole.
2. Single source of truth. Many companies struggle with conflicting versions of the truth—which is usually due to disparate IT systems and massive volumes of data housed in different places. xP&A creates a single source of truth, so planners and decision-makers can all work with the same set of numbers and information.
3. Full business alignment. With xP&A, strategic, financial, and operational plans are synchronised — ensuring the entire business is in alignment and working towards a shared vision of success. xP&A also makes it clear how one department’s activities impact another, which encourages teams to collaborate and align on priorities.
4. Greater agility. With a cross-functional view of the business and a single source of truth, leaders are better equipped to understand what is happening in real time and make adjustments as needed. Close business alignment also helps them rapidly seize new opportunities, spot and mitigate risks, identify ways to cut costs and inefficiencies, and move as nimbly as a start-up.
5. Automated, continuous planning. Continuous planning, where plans are continually updated based on changing conditions and events, is central to xP&A. Good xP&A tools make this process easy: when a change occurs in one plan, all related plans are automatically updated. This automation minimises manual work and keeps everything in sync, even in times of rapid change.