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3 keys to automating FP&A in R&D-intensive environments

If you have asked yourself whether automating FP&A in R&D when your business model keeps evolving is a contradiction in terms, you are not alone. How can you automate FP&A business processes within an ever-changing context?

Here are 3 key factors for making FP&A automation practical and successful.

1. Start with all the required parameters - automate relevant data collection

collecting dataMost CPM software is three-dimensional: time, departments and accounts. In an R&D-intensive environment you need a fourth dimension: projects. Unless you can include that critical piece in your parameters setup, you're no better off than you are today, and will be unable to keep both a corporate and a portfolio outlook.

With four dimensions in place, you will be able to quickly adjust to changes in your corporate structure—say, you decide to collaborate with a third party on a specific project in your portfolio; and in your portfolio's health—e.g., there's a clinical delay, and you need to readjust your portfolio priorities. That's where Portfolio & Corporate Performance Management (P&CPM for short) software comes in handy: a single platform from which you can gather information from any angle you need.

More than automation per se, this first factor is a matter of addressing your business structure in modules according to your needs, then rearranging or changing individual modules as the business model changes: automate the data collection, keep a flexible structure that can be adjusted as required.

2. Link all your existing systems - automate data exchange

linking systemsUnless you have a substantial budget to build custom HR, time keeping, ERP and other systems and weave them all into a proprietary dashboard, you need a nimble unifying platform that works with all your off-the-shelf or semi-customized systems. As you upgrade to more sophisticated platforms, you must keep the information flowing to enable continued analysis, planning and reporting.

The automation here consists in standardizing the data exchange among systems, so that you can focus on the higher-level thinking part of the FP&A process. Again, there is an underlying modular approach here, where different systems may change, but a robust data connector keeps the data coherent, and the flow continuous.

3. Streamline your analysis & reporting system – automate data analysis & reporting

automating FPThe faster you convert your data into information that can be quickly analyzed—providing knowledge that allows your management team to evaluate performance—the better. If you have automated the relevant data collection and the data exchange, streamlining the analysis and reporting is the icing on the cake.

As your business model evolves or changes outright, the essential parameters should remain in place—even if they originate from different sources. The modular architecture of the systems that feed data into your FP&A process can be adapted to accommodate new frameworks, provided you have a flexible unifying platform. A good portion of the automated analysis will always remain relevant.

The higher up the FP&A process, the more critical human intelligence becomes. The planning needs to adjust to changing business scenarios—say, an IPO, government grants, a product launch or a new collaboration agreement with specific requirements. You can quickly adapt your business processes, and identify new opportunities to automate FP&A provided you have a flexible unifying platform that both incorporates standard reports and allows for quick configuration of new reports based on your audience's requirements.

In short: the key lies in the balance between automation (standardization) and flexibility (adaptation). Excel is a rudimentary approach to automating FP&A in R&D-intensive environments—or any other environment, for that matter. Though FP&A professionals could hardly manage without Excel, it is so flexible that data integrity becomes an issue in more complex business contexts. So when you are looking for a tool to automate FP&A in an R&D context, consider the key factors above and identify which tool (or tools) already incorporate most of the best practices in your industry, while providing the optimum amount of flexibility to keep pace with your changing business model.