Planning that survives reality
FP&A isn’t forecasting for its own sake—it’s decision support. The work only matters if it helps leaders choose well under uncertainty: what to change, what to keep, what to stop, and what risks they’re actually taking.
This perspective uses a common enterprise decision: replacing core software with a revenue-share vendor model. The offer sounds attractive, but the cost structure changes in ways that can quietly compound for years.
Cost structure (fixed vs. variable)
- A revenue-share model turns a controllable function into an unbounded variable cost
- The question becomes whether the value created exceeds the fee at scale
Contract reality (sunk cost and obligations)
- Current commitments don’t disappear when preferences change
- A “switch” decision is often a stack decision: old costs plus new costs
Compounding assumptions
- Revenue growth increases vendor fees every year
- Payroll inflation typically grows slower than revenue-share escalation
- Small percentage errors become large over long terms