Modernizing FP&A in 2024 With Ken Lane

Welcome to FP&A Tomorrow, where we discuss financial planning and analysis, examining its current state and future prospects, with your host Paul Barnhurst.

In today’s episode, Paul Barnhurst is joined by Ken Lane, to discuss what makes great FP&A, the challenges and opportunities in mid-market companies, and the impact of technology and AI on finance.

Ken, a seasoned financial controller and FP&A professioal from Ontario, provides valuable guidance about the importance of collaboration, the role of AI and technology, and why he feels mid-market companies allow you to make a bigger difference in the work you are doing.

Here is a summary of the key points from the discussion:

• Great FP&A is about collaboration across all entities within a business. Understanding and addressing the bottlenecks in each area is crucial for driving meaningful business change.

• Discussion on the necessity for mid-market companies to upgrade their legacy systems to leverage the full value of future FP&A. He highlights the challenges and the importance of investing in technology to streamline data and improve decision-making.

• The episode delves into the ongoing supply chain issues post-COVID. Ken explains how these challenges necessitate holding more inventory, which impacts cash flow and requires careful management of cash conversion cycles.

• The discussion highlights how Gen Z's expectations for efficient and advanced systems are pushing companies to invest in better technology. This shift is essential for retaining top talent and staying competitive in the market.
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• Ken stresses the importance of understanding the broader picture of the business and continuously learning. Whether it's through different industries or new technologies, staying adaptable and informed is key to succeeding in FP&A.

Quotes:

Here are a few relevant quotes from the episode

• "A lot of mid-market companies still have a lot of legacy systems or multiple legacy systems within a business, and they're going to need to upgrade and change those to get the full value of the future of FP&A.”
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• “When I'm in mid-market companies, I feel like that when you're helping out or you're driving decision-making, you see that impact on the bottom line. When I was with large companies I would see a strategy that would come down from the corporate office, but didn't understand how what I did fed into that strategy.”

Follow Ken:

LinkedIn - https://www.linkedin.com/in/kennethlane/

Website - https://smoothaccounting.ca/

Follow Paul:

Website - https://www.thefpandaguy.com

LinkedIn - https://www.linkedin.com/in/thefpandaguy

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In today's episode:

[00:00] - Introduction

[00:47] - Guest Introduction

[02:01] - Anticipating Changes in FP&A

[02:40] - The Challenge of Legacy Systems

[03:35] - Guest’s Career Journey

[06:51] - Impactful Mid-Market Examples

[08:52] - Attraction to Manufacturing

[09:57] - Key Metrics in Manufacturing

[12:12] - Transition to FP&A

[15:50] - Managing Technology on a Limited Budget

[17:47] - Choosing the Right ERP Partner

[20:19] - Real-Time Decision Making with AI

[23:02] - Investing in Tech to Retain Talent

[24:55] - Rapid Fire Session

[25:57] - Role-Level Headcount Planning

[27:10] - Importance of Clean Data

[29:20] - Get to Know the guest

[32:20] - Advice for Better Business Partnering

[32:55] - Conclusion and Contact Information

Full Show Transcript: 

Host: Paul Barnhurst:: Hello, everyone. Welcome to FP&A Tomorrow, where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst, guiding you through the evolving landscape of FP&A. Each week, we're joined by thought leaders, industry experts, and practitioners who share their insights and experiences helping us navigate today's complexities and tomorrow's uncertainties. Whether you're a seasoned professional or just starting your FP&A journey, this show has something for everyone. This week, I am thrilled to welcome to the show Ken Lane. Ken, welcome to the show.

Guest: Ken Lane:: Oh, thank you for having me, Paul.

Host: Paul Barnhurst:: Yes, excited to have you. So just a little bit of background about Ken and I'll allow him to introduce himself further in a few minutes. But he comes to us from Ontario, Canada. He is a financial controller. He spent most of his career either working as a controller or manager, finance, or accounting, and he spent most of it in the mid-market, in several different industries. So, Ken, we like to start the show with this question for all our guests? From your viewpoint, what does grade FP&A look like?

Guest: Ken Lane:: For me, the great FP&A is a collaboration with all the entities within your business. Because the goal of FP&A is to drive business change. So you need to understand the bottlenecks in each area. If those people feel heard, they'll buy into what you're delivering.

Host: Paul Barnhurst:: I would agree with that. So it's around collaboration and making sure the business feels heard.

Guest: Ken Lane:: Correct.

Host: Paul Barnhurst:: What are your thoughts? What do you expect it to look like in the next 3 to 5 years? Do you think what grade FP&A is going to change with everything that's going on with technology and other things?

Guest: Ken Lane:: I do, I think it will. I think in large companies it's going to change faster than in smaller mid-market companies. The reason is I think a lot of mid-market companies still have a lot of legacy systems or multiple legacy systems within a business, and they're going to need to upgrade and change those to get the full value of the future of FP&A.

Host: Paul Barnhurst:: We're not speaking from experience, having worked with a lot of mid-markets by chance, are we?

Guest: Ken Lane:: Not at all.

Host: Paul Barnhurst:: I'm sure you could tell me some data horror stories. That's probably what I should start off with. Tell me your worst data horror story. I keep that in mind for future episodes. Tell me a little bit about yourself and your background.

Guest: Ken Lane:: Yes. So I'm here in southern Ontario. Been in accounting now for 20-plus years. To be honest, went through school, came out with a computer science degree, and then fell into accounting and then worked my way up, worked with some great mentors, then went back and took some university courses for management, accounting, financial accounting, all those key things. But it never worked my way through to get licensed as a CPA. Then I've transitioned from working across a whole variety of industries, some of those interesting enough to progress and take a step up. Then even in some of those took a step back because a job or role had skills that maybe I didn't have yet. So went back in pay, went back maybe in leadership to eventually elevate myself later.

Host: Paul Barnhurst:: Got it. What led to accounting if you started with computer science? Maybe dig into that a little. I'm curious how the switch happened.

Guest: Ken Lane:: Sure. I got my first job with a finance organization, a financial banking organization, and they were looking for someone who both understood the business and understood IT. I fit that role. Growing up, my parents had multiple small businesses, and my mom always did the accounting, so I was always around it. So it wasn't brand new to me. I'd been around it. It comes naturally to me to a certain extent. So I'd seen it growing up using original ledger books writing it in pencil and putting everything in the ledger books and sawing all that, seeing all that. Then when I went to this finance institution, I did both for a while and then they opted, they felt that I gave them more value on the accounting side and then kept pushing me to progress and progress and progress. I just realized that I did enjoy it. Then started taking additional courses and doing everything to get certifications to...