The difference between FP&A and ERP, CRM, or BI solutions

Today, in the midst of the technological boom of the 21st century, every professional has worked with Business Intelligence (BI), CRM, or ERP programs. We agree that to a greater or lesser extent they allow us to exploit data with an ease that did not exist before and to understand our profitability. However, Financial Planning & Analysis (FP&A) solutions are on the rise

What about solutions for the finance area? And how can we measure it?

The professionals that make it up sometimes find themselves in a dilemma between using Excel, depending on the rigidity of their ERP, learning to use the company’s BI tool, or in the best of cases, having their own tool, which is categorized as a Financial Planning & Analysis (FP&A) solution.

As we discussed in our article «The digital transformation of the finance manager«, the technological transformation is taking place little by little in all areas of a company, even so, as a result of our experience speaking with several clients, both small, medium and large corporations, Finance is bound to depend on technologies that are controlled by another area or worse, that are not created to cover their entire work process.

The main 5 tools with which Finance can interact are the company’s ERP, its multiple daily work Excels, the CRM that it shares with Sales or Marketing, the Business Intelligence software if it exists, and its own FP&A tool.

So, if there are so many tools…

What is different about FP&A solutions to be able to say that they are made for the finance area?

This is the difference from the point of view of the CFO, the Planning Manager, Management Control Analyst, and the finance team.

• What is an FP&A solution used for?

The budget, its control, and its analysis, comprise several activities and several people involved. If this process does not have organization, errors, confusion, inefficiencies due to loss of time, become inevitable (you can learn about the most common obstacles in our note «The challenges of the finance area«).

FP&A solutions seek to optimize these processes between work teams through automation

It allows us to save time, organize processes, integrate information from multiple sources, and understand our PROFITABILITY.

• Who uses them?

Unlike the other tools, used for example by a dispatch analyst, a salesperson or a call center manager; These types of solutions are used mostly by the CFO, Planning or Treasury Managers and their collaborators.

Since they concentrate all the information from a financial approach.

And it allows us to report to management and shareholders on the profitability of our business.

In addition, if what you are looking for is to “decentralize the budget”, these platforms allow you to work with the person in charge by area, CeCo and consolidate information from multiple sources.

It also allows us to work on a flow of top-down and button-up approvals and goals.

• When are they used?

The use of these solutions varies according to those responsible, for example, going through an annual closing is not the same as going through a month of projection.

A finance analyst, or a finance team, looking to keep track of the budget, can access it on a weekly or even daily basis, intensifying its use at month-end closing times, or when creating an annual budget.

A person in charge of a Cost Center will have their area reports in real time, and may enter monthly.

The management can access to analyze the reports, and analyze the profitability and cash flow.

This is how these programs allow each professional in the organization, to enter when required, with their own user, and in turn can work at the same time as their colleagues in a shared environment, the ultimate goal being to enhance data analysis throughout the process.

• To make decisions, to what level of detail is it necessary to access? What happens if a deeper analysis is required?

A common confusion between a BI and an FP&A tool is the depth of data each offers for analysis. Today these Cloud Financial Planning & Analysis category solutions are making leaps and bounds in offering complex and deep analytics.

Unlike BI and ERP, FP&A tools like Plika work on the entire process (budget, control, forecast and reports).

This allows information to be generated in real time within the same tool, at the same time as it is complemented by the connection to other sources.

We invite you to read the Advantages of taking corporate finances in the cloud

What is clear is that the information of an FP&A solution will generally focus on the economic, the financial.

Even so, the existing integrations with external sources, BI and ERP help us to exploit data to obtain a comprehensive vision.

These platforms allow us to create custom dashboards, or connect the company’s ERP to perform management control automatically.

• Many will wonder… Are they solutions for the finance area, but do I depend on a Systems expert to use them?

Financial Planning & Analysis solutions seek to empower the finance area by granting the possibility of having a solution that does not generate dependencies, but rather offers autonomy.

How is it achieved? With friendly interfaces and designs, minimal learning curves, and solutions as close to what is called «self-service», they allow a finance professional to dive into the data and generate business insights without the need to be an expert or without need to knock on the Systems door to make important changes.

We invite you to delve into these possibilities in our article on the «analytical minds that will drive transformation in companies».

Are all these tools complementary or substitutes for each other?

As the reader will know, each type of software has its strong point, and that is why the existing technological advance points its way to the integration between technologies.

These solutions coexist without problems, and are a complement, designed to enhance the finance area.

A CRM that contains specific information on each client, together with an ERP that allows detailed control of each accounting transaction of the company, plus a BI that helps certain areas to generate key insights in a specific way, and finally an FP&A solution that provides productivity and organization to workflows between several people as well as allowing a quick and exact analysis of the economic or financial information of the business.