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xP&A puts the operational plan and the financial plan on 1 model.
We explain what xP&A adds to FP&A, where the term came from and when a group is ready for it.
Extended planning and analysis (xP&A) takes financial planning into the operational plans that drive it. The headcount plan, the sales plan and the supply plan sit on the same model, entities and periods as the P&L. The term dates from 2020, for FP&A platforms sold to the rest of the business.
- What it extends
- Workforce, sales, marketing, supply chain and IT plans. Each function builds its own plan on the finance team's planning platform.
- What it asks of the model
- The operational plans and the financial plan read 1 set of dimensions, so a change to headcount shows up in the P&L.
- Where we sit
- Constancia is an EPM consultancy. Before we join any plans, we check that the financial plan and the operational plans share 1 set of definitions.
xP&A extends the finance plan to 5 other functions, and each function keeps ownership of its own plan.
The operational plans cover headcount in HR, quotas in sales, campaigns in marketing, volume in the supply chain and projects in IT. Each function keeps its own plan, and finance reads the totals.
The link between the plans works in both directions. A hiring plan of 40 roles moves the payroll line and the cash forecast in the month it changes, with no analyst re-keying the numbers.
A sales quota file and a finance forecast last agreed in different quarters give the board 2 revenue numbers.
The term xP&A dates from 2020, when FP&A platforms began selling planning to teams outside finance.
The term extended planning and analysis first appeared in 2020, as FP&A platforms started selling to teams outside finance.
xP&A is a planning strategy built on 1 platform, and it stretches FP&A across several business functions.
Workday, Anaplan, Pigment and Board all took up the term, and each now sells planning to HR and sales teams.
The financial plan and the operational plans need to share 4 definitions for xP&A, starting with the entity.
- 01
The entity
Each hire or sale belongs to a legal entity or business unit, spelled the same way in HR, the CRM and the ledger.
- 02
The period
Each plan runs by the month or the week, and a weekly sales plan rolls into the monthly P&L without a manual bridge.
- 03
The unit
Plans count heads, hours, units or currency, and finance owns the single conversion to money that each function accepts.
- 04
The owner
A named person outside finance stands behind each driver when the board challenges the forecast.
5 planning platforms sell xP&A, and 1 EPM platform runs it on the same model the group closes its books on.
Anaplan connects data and workflows to role-based agents. Pigment runs integrated business planning across finance, sales, HR and supply chain. Workday sells planning alongside its own HR system.
Board brings finance and operations teams together on 1 platform. Abacum (FP&A software) links to the source systems through more than 700 integrations.
OneStream (EPM software) plans on the same model the consolidation runs on. The operational plan then lands on the entities the statutory close uses.
A group is ready for xP&A once its financial plan reconciles to the actuals every month.
The financial plan should load actuals from the ledger and use the consolidation's entities, and each driver needs a named owner. A plan that fails those 3 tests carries its problems into HR and sales once it is extended.
Next, at least 1 function has to want to join. A sales team planning in a workbook finance cannot read usually welcomes the link, and a sales team planning in the CRM may see it as a fight over ownership.
Finally, the group needs a date to work towards, such as a budget round, a funding round or an integration where 2 sales teams must plan on 1 quota.
FP&A and xP&A differ in who builds each plan, and finance owns the model in both.
| FP&A | xP&A | |
|---|---|---|
| Who builds the plan | The finance team, from templates the functions fill in. | Each function, in its own workspace on the shared model. |
| What the plan holds | Revenue, cost, cash and headcount, in money. | Heads, quotas, units and campaigns, converted to money by rules finance owns. |
| The period | Monthly, on the finance calendar. | Weekly or daily in the functions, rolled up to monthly for finance. |
| The systems joined | The ERP and the consolidation. | HR, the CRM, the supply chain system and the ERP. |
| The owner of a driver | Finance, by default. | A named person in the function, with finance owning the conversion to money. |
| What breaks first | The link to the actuals. | The entity list, when HR and the CRM spell it differently. |
xP&A across 12 entities depends on the entity list, since HR, the CRM and the ledger each hold a copy.
Constancia is an EPM consultancy, and we compare the entity lists in HR, the CRM and the ledger before we join any plan to the financial one.
A group with 12 entities on 3 ERPs and 2 CRMs can have 5 spellings of each entity. We map those spellings to each other first.
We fix the price for the work after the survey. The operational plans then join the model in the order the survey sets out.
We cover FP&A, the planning platforms and S&OP on their own pages.
FP&A
The financial plan that xP&A builds on, with its 4 activities and the actuals it depends on.
Read about FP&AFP&A software
How the main planning platforms compare, and which kind of group each one fits.
Read the software listSales and operations planning
We put the supply plan and the revenue plan on 1 model, with 1 owner for volume.
Read about S&OP
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