40
1st QUARTER 2014
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By Andreas Rothe
Chief Financial Officer at Harsco Corporation
P
roviding timely and targeted analy-
sis for management is a challenge,
especially in a diverse and decentral-
ized multinational organization. The
main reason for this is the complexity of the
environment in which such companies oper-
ate. As a result of globalization, acquisitions,
and the competitive landscape, multinational
organizations face heterogeneity in systems
and inputs, and increasingly sophisticated
needs for planning. To handle this complex-
ity, they create overcomplicated structures
(multidimensional matrix organizations),
methodologies, and processes. But mirroring
that approach for the financial planning and
analysis (FP&A) function would lead to even
more involved reporting, hindering timely
analysis and delaying management decisions.
Despite the limitations of a one-size-fits-all
solution, and even after taking into consid-
eration the complexity of factors assisting
decision-making, simplification should
be the ultimate goal. Simplification and
standardization increase efficiency, and
thus enable FP&A to provide management
with relevant, actionable data as quickly as
possible.
As a guideline, the author has used the
following principles to guide the standardiza-
tion process:
• First focus on commonalities (and/or
creating them)
• Then deal with exceptions
STRUCTURE
H
ow should the ideal FP&A function be
structured? Where should it be placed?
The answer to these questions depends on
the degree of commonality. There are many
similarities between the requirements of the
local business and those of other recipients
of FP&A information. Especially in large
organizations, certain FP&A functions can
be shifted to shared service centers, reduc-
ing costs and allowing local FP&A staff to
focus on value-enhancing tasks. The table at
the top of pg. 41 outlines selected tasks the
author has assigned to centralized, decentral-
ized, and shared service functions.
SYSTEMS
W
e have all experienced that analysis
generally comes up short: Too much
time is spent on data collection and work-
sheet creation. Thus, management tends to
CFO CFO
Learn more about the author
Photography: 123RF Stock Photo
A SENSIBLEWAY TOAPPROACH
FINANCIAL PLANNING AND
ANALYSIS
FP&A in a
Globally
Decentralized
Environment
