Why being a stick-in-the-mud can undermine your FP&A implementation

Over the years, we’ve seen numerous failed implementations due to businesses that are unwilling to abandon legacy processes on the basis that ‘they work fine.' Instead of moving to best practice, they want their old, familiar way of doing this transplanted into a new solution with the addition of some automation, the removal of spreadsheets, and a bit of a facelift. 

If you, too, have inherited old processes and are under pressure to leave them in place, we suggest you read on.  

What are the dangers of sticking to your guns and replicating old processes in your new FP&A solution?

There are many. Read these and weep (and hopefully learn):

• You inherit outdated approaches: Old processes are usually based on the know-how (aka IP) of one or two people in the business. However, when they leave, you’re stuck with those outdated processes without necessarily understanding why they were done that way in the first place. They often rely on workarounds to overcome old problems importing data from legacy systems and a limited range of out-of-the-box tools. And it can be hard to see the benefits.  
• Your processes aren’t any more efficient than they were before. Oops. Despite spending a fair amount of time and money, you missed out on the opportunity  to adopt faster and more reliable methods to achieve the same results. In short, there was little point in adopting new technology if you were never going to leverage a better way of working. 
  Your data is a mess. Instead of decluttering your data (the stuff you’ve had sitting there for years and have never looked at but liked having), you carried it all over to the new FP&A solution. As a result, it’s harder to find the data you do need, your system is slower than it should be, and your data storage costs are higher than they should be.  
• You can’t predict your IT costs. Although IT costs continue to increase as a percentage of total cost, adhering to your old planning methodology makes it difficult to plan accurately for your software licensing and other IT costs. You’ve shot yourself in the foot.  
• Excel still rules. Even though you have powerful FP&A software at your fingertips, you continue to use Excel (because you know and love it) to aggregate data and manually send it to the next level for approval. So, all the time you hoped to save goes by the by, and your risk of incorrect data entry or inaccurate outcomes increases.   

Given the business impact of making these mistakes, the question is WHY businesses continue to make them. This is what we most commonly hear:

“We don’t like change – it’s hard work (and scary)!”

Yes, we all have habits, routines, and assumptions that we develop and adhere to - at home and at work. It’s human nature. Those processes have often evolved over long periods and become so deeply embedded that it’s hard to imagine an improved approach 

It can be even moredifficult to accept that change can be for the better due to the effort required to adapt when there’s already so much pressure in the workplace. Fear can also play a role in our reluctance to embrace new processes, with people scared to potentially show themselves up in front of their peers. 

(Here, we will mention the importance of organisation change management, aka OCM, and making sure that it’s adopted to get staff over that hump of resistance and get the best out of the new solution.)  

However, back to the topic. That is, it’s a mistake to confuse well-established practices with current best practice.  

“The world may have moved on, but we haven’t!”

Challenging the status quo processes is never easy. After all, well-followed methods work (after a style and based on what was available to work with when they were designed) and everyone is comfortable with them.

When you fail to consider best practice as the best forward path, you risk applying outdated approaches to solve new problems. You also miss out on the opportunities that new practices can identify.   

Now, we won’t name names, but we recently talked to a manufacturer who had spent over two years implementing an FP&A solution with one of our competitors. Despite investing well over $1M at the time of speaking to them, the business despaired of ever achieving go-live and made the incredibly tough decision to walk away from the entire project.  

That’s a big call to make, but they did it for the right reason. Instead of adopting – and adapting to best practice, the business insisted on replicating a 20-year-old system – minus the spreadsheets. And neither the business stakeholders nor their implementation partner called out the logic of that decision.  

Ultimately, the manufacturer and partner couldn’t make the FP&A solution deliver the expected business benefits using old processes. It was a waste of time and effort. 

Fixing your future

Truly adopting a new FP&A solution means accepting that your old processes were broken. They did the job at the time, but they were built around the technology, capabilities, and knowledge you had back then. 

A new FP&A solution represents more than a facelift. It’s an investment in your business's future. So, if you haven’t already, it’s time to let go of old ways and embrace the opportunity to make better decisions, work smarter, and realise your potential - and not make the fundamental mistake of clinging to the past.