As part of the Preparing for the Next Level of Financial Planning & Analysis study, APQC and AFP spoke with FinNext 2020 speaker Geetanjali Tandon, digital and transformational finance lead at Bayer Crop Science, about the increasing importance of financial investment in IT.

Tandon has spent her career in finance, strategy and analysis, primarily at Monsanto (now Bayer Crop Science) and Capital One. According to Tandon, FP&A must continually invest in new technologies that allow analysts to shift from an emphasis on data gathering and reporting to analysis and decision support. However, finance also needs to understand when it’s not the time to invest in new technology.

APQC/AFP: Your current position is in IT finance. What is encompassed in that role?

Tandon: I am the finance business partner for IT, so my work involves IT controlling, which includes budgeting, long-term planning and strategic planning. Portfolio management has also become a big part of my role. IT expenses are moving from a back-office function to the front office because these expenses are impacting revenues and productivity. A lot of companies are investing in IT not only for support services but also for revenue sources now, so there is a huge portfolio to manage.

As IT becomes a bigger and bigger part of profit and loss, it raises a number of important questions: How do you make decisions in those portfolios? Who is going to make sure that we are investing in the right places and measuring the ongoing impact on IT expenses based on all of that investment? What should we be investing in and what are our roadmaps? Managing the portfolio with these questions in mind involves working with the CIO to look at IT’s strategy from a longer-term perspective rather than simply examining costs as a percentage of revenue.

APQC/AFP: So, it may be a situation where in some cases you’re advocating an increase in IT cost while in others you might be advocating pullback or trimming from legacy systems?

Tandon: Exactly. We have approval conversations where we say: “You’re adding this, but what are you retiring?” Unless and until you have a roadmap of retirement along with what you’re adding, we’re not sure whether we want to invest in anything more because it’s just incrementally increasing.

APQC/AFP: You have a breadth of experience in different finance, strategy, and analysis roles. How have you seen the outcomes of FP&A improve over time?

Tandon: I believe that the output of FP&A has improved over time, but we still spend a lot of our time reconciling. A lot of legacy companies have disparate data systems. Whether they have grown through acquisitions or they have grown more organically, many are still invested in these legacy systems and there has been limited investment in more streamlined financial data systems. That has led to a situation where FP&A analysts are extracting the data from different systems and spending an inordinate amount of time reconciling the data before they can think about what the data is saying.

To continue improving, we must look at the foundation. We must look at where the data is coming from and find a way to connect financial data to operational metrics without a lot of extra steps. There are so many tools that help with visualization, but still we are spending a lot of time wondering if the data is accurate. We need to continue investing in the systems, the foundations, and overarching data governance and management. Our FP&A analysts need to become better in those areas. They need to learn the language and be able to talk about it in that language.

APQC/AFP: Does learning and speaking the language of data become totally vested within FP&A or does that become more of a sub-specialty?

Tandon: FP&A analysts need to know the business very well. A good FP&A partner understands the business and can translate data for the business. They do not need to become data experts because ideally, they should form partnerships with IT or the team who manages the data to be able to have conversations about things like data governance and data management. I don’t think very many FP&A groups know how to do that now.

APQC/AFP: Has your organization approached Agile in a significant way? Is that a big part of your IT or is it something that is still on the horizon?

Tandon: At legacy Monsanto there was a transformation and we did adopt Agile, especially in IT. We are working on platforms in product management rather than through siloed functions. There are certain areas where we are still using a waterfall approach, but most of our product development is now happening through Agile. Agile is getting started at Bayer but it is a large company, so it takes time.

Although we shifted to an Agile approach for IT, the functions supporting IT were still doing things in a traditional way, which was a challenge. It led to a lot of roadblocks in implementing Agile because finance had not adapted to that Agile way of thinking. It’s not just IT finance—we are working with corporate finance to bring it all together and they don’t work in an Agile way either, so we had to adapt. In IT, we started very small by finding workarounds in those areas where we are creating roadblocks for our business partners to do their job properly. We started changing those processes and policies to adapt to those needs while also working with our corporate groups to ensure compliance.

While we have not fully adapted to Agile within IT finance, I don’t think we need to go fully Agile because Agile needs a lot more control over expenses. In the traditional way you get a budget and you work from it. With Agile you still get annual approval for a budget with items like operating expenses or capital expenses, but they don’t know fully what they’re going to do with it. You have to really be on top of things and help them understand the impact of their decisions a lot more than was done in the traditional way. We have spent a lot of time reinforcing the idea that teams cannot make unilateral decisions because there are other competing priorities for the company that may be more important.

For that reason, we had to put processes in place to make faster decisions around budgeting. If a certain investment or area of development is being delayed, we have to make quick decisions because there are tons of other projects that never got budgeted. That means we have to do a lot more communication and work to understand where they are spending the money and why are they spending it.

APQC/AFP: How hard is it to communicate with your leaders to manage an Agile IT approach with a traditional budget?

Tandon: It’s been a slow process. As a finance business partner to IT, I became the storyteller for IT. I go to our finance leadership team individually and really explain IT to them. One of the responsibilities that comes with that role is that you have to be transparent. You cannot just go and ask for money or changes in policy without explaining where you’re spending the money. You have to be able to explain your cost and also sometimes explain more abstract concepts like the cloud.

Don’t miss Geetanjali Tandon’s session, Using Decision Analytics to Manage Portfolios, next week at FinNext 2020 in New Orleans. Register here.