As the finance function continues to shift toward the strategic core of the enterprise, CFOs are actively seeking top talent who can help them plan effectively for the future—for example, the right person to lead key teams such as financial planning and analysis (FP&A).

This role requires both data interpretation skills and a big-picture perspective, which is no easy task. Cosmin Pitigoi, CFO of global payment service provider Flywire, says FP&A professionals "must be multi-faceted and able to connect the dots across various functions within finance."

Pitigoi joined Flywire, headquartered in Boston, Massachusetts, as its finance leader in March, after spending 11 years at PayPal in various roles—according to his LinkedIn profile, he served as Senior Vice President of Global FP&A, Operations Finance, and Pricing, overseeing the FP&A function.

According to Oracle, FP&A teams oversee some of the most critical processes within the finance function, including forecasting, scenario planning, and other analytical work that supports strategic business decisions. FP&A teams typically focus on forward-looking projections rather than retrospective accounting or day-to-day cash management, and their importance has grown steadily in recent years. For CFOs who now serve as key partners to CEOs in strategic planning and decision-making, having a trusted FP&A leader is essential.

Operational backbone

FP&A is a critical link ensuring business processes run efficiently and smoothly. Alongside the Chief Accounting Officer (CAO) and the Controller, FP&A leaders are indispensable components of a high-performing finance team. The CAO focuses on areas related to financial systems and governance, the Controller focuses on processes such as quarterly close, while FP&A leaders act as a bridge between finance and other key parts of the business.

Pitigoi said in an interview that, for example, employees don't need to go to the analytics department, HR, or marketing separately to get information to answer a question—they can go directly to FP&A, where they see all the data consolidated. He called the FP&A team "the company's operational muscle."

To ensure this "muscle" functions properly, FP&A function leaders need to be comfortable wearing multiple hats and be able to pull different data threads from across the business to present a clear, comprehensive picture to the CFO.

"Great FP&A talent should have the mindset: 'I'm your right-hand person, let me handle everything for you,'" Pitigoi said.

Other experts have also described FP&A as a kind of "corporate octopus," with tentacles reaching into every part of the business to integrate the data needed and provide key insights, according to a 2023 report from CFO Dive.

Compensation for FP&A leaders can be comparable to other senior positions in the finance department. According to a recent article by FP&A software provider Cube, the annual salary for a VP or Director of FP&A is approximately $200,000. By comparison, CFO Dive previously reported that the average annual salary for a Chief Accounting Officer is approximately $238,200, making it the second-highest position in the finance function after the CFO.

As technologies such as artificial intelligence further highlight the value of data-driven insights, the importance of FP&A leadership continues to rise. A recent Gartner report found that 97% of finance leaders believe the scope of global FP&A responsibilities has expanded over the past few years.

This expansion of responsibilities comes as most CFOs (84%) face significant talent shortages in accounting and finance teams, according to a 2023 study by tax compliance software provider Avalara. The study surveyed business leaders in the U.S. and the U.K., with 49% of finance executives noting a lack of FP&A expertise within their finance functions.

Integrated planning blueprint

A well-functioning FP&A team, coupled with strong leadership, can also provide a company with an advantage over its competitors, said Randeep Rathindran, Vice President and team leader at Gartner.

"Often, if you ask companies: 'What is your differentiator? What is the source of your competitive advantage?' They'll say: 'It's our product, our brand, operational excellence, or cost leadership.'" Rathindran said in an interview. "And FP&A people would say that the way you plan and the way you make decisions is just as much a source of competitive advantage as your company's brand."

Rathindran noted that over the past few years, many teams have created a sub-group within FP&A, the "decision support group," to provide critical support to CFOs who juggle both operational and financial needs. In an environment where data-driven strategy provides a key competitive advantage, the pressure on FP&A teams as finance's "true analytical engine" is only increasing, said Edward Bush, CFO of FP&A software provider Cube.

"This is the same expectation for the FP&A function as five to ten years ago, but to a much higher degree," Bush said in an interview. As CFOs evolve into "Chief Future Officers" and take on more strategic responsibilities, FP&A support is critical.

Embracing AI-driven finance transformation

Today's FP&A leaders must serve as the CFO's analytical right hand—a kind of institutional data brain trust—which can give FP&A professionals critical operational experience as they explore potential paths to the CFO role.

Before joining payment platform Flywire as CFO, Pitigoi led a 400-person team as head of FP&A at payment service provider PayPal. He revealed that when PayPal's then-CFO John Rainey left, this role made him the operational bridge, managing financial matters alongside the head of investor relations.

This experience not only helped him develop strong business operations management skills, but also provided key lessons on how to create impact for the enterprise from a "leadership perspective," Pitigoi said.

For leaders aspiring to FP&A or CFO roles, it is crucial to clearly understand how emerging technologies such as AI and automation are transforming the traditional role of finance. Pitigoi noted, for example, that some members of his FP&A team have programming skills on par with those of the analyst team—a change driven by the fact that technical and data skills are becoming as important as accounting or finance knowledge.

The need to cultivate both types of skills stems from the fact that nearly all (92%) CFOs in the Avalara survey said they believe AI will help improve efficiency and drive productivity and profitability growth. In the case of FP&A, according to Gartner, CFOs are looking at how generative AI can be applied to scenarios such as forecasting and budget variance.

Emerging technologies such as artificial intelligence are beginning to accelerate a trend that has been building in finance for more than two decades—becoming the company's strategic voice, said Christina Ross, CEO of Cube.

"Finance and FP&A 'still haven't fully realized their potential,'" Ross said in an interview. But "if you imagine a timeline from fully transactional to strategic, that curve has accelerated about 10 times over the past decade or so," Ross said, "and it all started with automation."