xP&A stands for extended planning and analysis—taking the best of modern finance planning and extending it across the enterprise. But it’s not new. We’ve been calling it company-wide planning for years.
Finance leaders whose organizations have been made more agile and strategic with modern planning and analysis have known for years that their approach to planning can transform other parts of the business. Now, as they work to recover from the global COVID-19 pandemic, that awareness is more valuable than ever.
Growing recognition around expanding the use of FP&A best practices beyond finance recently earned an industry imprimatur from Gartner, whose 2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions report said, “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.”*
We agree that bringing continuous, comprehensive, and collaborative planning to every part of an enterprise has not only arrived, it’s ascendant.
We’ve been advocating the concept since back when we began working with customers to harness the platform and processes of modern planning from financial planning to sales, workforce, and operational planning. Our solutions for enterprise planning are defined by powerful automation, enterprise-class scalability, intelligent planning assisted by machine learning, always-on cloud availability, and award-winning ease of use.
These requirements have essentially served as design standards for planning solutions from Workday, where we’ve always believed that the promise of enterprise planning can only be realized by linking finance and operations in a holistic and seamless way.
Extended planning, orchestrated by finance
Finance is the natural steward of enterprise data, so it makes sense that finance should orchestrate company-wide planning. According to Gartner, “The office of finance is uniquely positioned to drive continuous company-wide financial planning and analysis (FP&A) initiatives. Finance’s connection to all other business domains means that these initiatives will be capable of driving higher-quality decisions and outcomes.”*
In fact, Gartner says, “By 2024, 50% of new financial planning and analysis implementations, upgrades and replacements will be sourced from core financials vendors, due to superior integration and product bundling.”*
This capability has never been more critical. For operations, where plans are generally refreshed more frequently and based on greater volumes of data, understanding the financial impact of every decision can ultimately mitigate the risk of executing those decisions. And seamless access to current operational data and actuals can also improve the confidence of the C-suite in the firm’s business projections. And these days, who doesn’t need a bit more confidence?
Company-wide planning done right: Meeting the needs of xP&A
Developing a solution for planning across the enterprise isn’t a small undertaking. It requires three fundamental capabilities.
A flexible and scalable modeling platform.
Those who’ve built models with traditional planning software are accustomed to limits on dimensions, or they know too well the experience of waiting (and waiting) on results. To solve this, and to enable modeling at enterprise scale, we developed Elastic Hypercube Technology—our groundbreaking, patent-pending modeling engine that doesn’t force organizations to make compromises that slow insight or limit the number of scenarios a team can evaluate. For company-wide planning, this means creating models for virtually any kind of functional use. You can model and plan at the work-group level and then combine those plans into a comprehensive, holistic model of the business. It’s modeling for an xP&A world.
The ability to seamlessly plan-execute-analyze business processes.
Planning isn’t done in a vacuum, particularly in an xP&A context. For true company-wide planning, plans must be integrated to gain a comprehensive view of the business. Our federated planning architecture enables each function or business unit to have its own planning instance while preserving the ability to bring all the pieces together into a holistic plan. With federated planning, a change to one plan automatically updates all related plans. This architecture also makes it easy to dovetail planning with the applications organizations use to execute those plans (such as financial management or human capital management solutions), and then analyze data and results to support faster, smarter decision-making. Company-wide planning also requires a single source for truth, with plans and applications sharing the same data across planning and execution, just as Workday applications do today. As Gartner notes, “Suite-based applications consume data from a single source and share the same metadata and master data. This means that overall company-wide financial reporting and governance is substantially enhanced.”*
Easy adoption and use.
Traditional planning platforms are notoriously difficult to implement and use. This has kept them locked away in the office of finance, their complex environments all but dooming them to be used by just a handful of highly trained analysts. For xP&A to take root in the form of company-wide planning, it was necessary to recognize that in business, everybody plans. So planning has to be easy. Here’s just one way we’ve improved ease of use: Active dashboards, announced at Adaptive Live earlier this year, blend driver-based planning with interactive analytics to help users assess the impact of their changes in real time. And rich data access rules ensure administrators can be very specific about what data users can view or edit, making it that much easier to safely enable more stakeholders to be active participants in company-wide planning.
The journey to company-wide planning: xP&A in action
For most companies, the journey to company-wide planning begins in finance. Many companies, after seeing the success they’ve had there, expand planning to other departments like HR for workforce planning and sales for sales planning, with both plans linked back to the corporate model. This federated planning environment allows each entity and function to plan the way it needs to, but all plans are seamlessly connected to a holistic corporate plan. This helps create a more agile, competitive organization where decisions are made based on insight rather than instinct.
Customer surveys show that Workday Adaptive Planning customers are prime examples that company-wide planning is indeed the future. Demonstrating classic use cases for xP&A, they’ve extended their modern planning environment into areas as varied as inventory and shop floor space planning, sales rep ramp modeling, and product pricing planning. Many others are using our workforce planning solution to model their optimal workforce, and still more are relying on their planning environment to design a return-to-work strategy at a time of unprecedented disruption.
Take Rubrik, a rapidly growing global provider of cloud-based data management and protection solutions. Rubrik initially deployed Workday Adaptive Planning in finance to streamline budgeting and accelerate quarterly close. Building on that success and to achieve a more accurate and timely top-line plan, the company extended its use of Workday Adaptive Planning to sales finance and sales operations to automate bookings, improve seller capacity and productivity, and plan and manage territories and quotas.
Ajay Sabhlok, vice president of IT business applications at Rubrik, describes the company’s xP&A pivot to company-wide planning as a significant step forward.
“To automate planning in a comprehensive manner across the company,” says Sabhlok, “is setting the foundation for growth.”
In the end, that’s what company-wide planning is all about. In a world where the future is harder and harder to predict, agility is everything. As thousands of Workday customers already know and as many more throughout the industry are coming to realize, finance is showing the entire enterprise how to plan for what’s next. No matter what you call it—xP&A, company-wide planning, or something else—one thing is certain. This is the future of planning.
*Gartner, 2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions, Robert Anderson, John Van Decker, 21 February 2020.