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The Future of Financial Planning: Succeed with FP&A plus New Tech
(6 min read)
Modern CFOs agree: in order to effectively plan for your organization’s financial future, you need more than financial data. Non-financial data gives companies a more accurate picture, allowing them to anticipate their needs and strategize effectively. Paired with cutting-edge technologies in the realms of Artificial Intelligence/Machine Learning and CRM, you can harness the power of your financial and customer-related data to become more responsive and plan according to the most current information. These tools remove potential human bias in processing data, make it easier and more effective to visualize, and give CFOs a more accurate view of the company’s financial future.
Financial Planning & Analysis (FP&A) to the Rescue
So how can you implement this new approach to finance and data? Your FP&A professionals are the company’s secret weapon. They’ll use current technologies to help them weave a story around the numbers and pursue company goals. No longer just budgeting or controlling, today’s financial teams help to implement the CFO’s vision using key drivers and indicators and not just historical data. With KPIs, analytics, and algorithm-driven data at their fingertips, they’ll use their own agile analysis to craft future business scenarios and drive the development of strategy beyond the finance department.
Seeing Your Data
You have the skilled FP&A team, but what about your most important tool: the data? Even with the most current data, you can’t make future projections without making the present visually accessible. Increasingly, companies are turning to Artificial Intelligence (AI) and Machine Learning to get the fastest, most accurate view of current company data. With a complete, dynamically updating picture of your data—rolling forecasts instead of quarterly or yearly projections—your financial team is well placed to create informed strategy for the company’s future. Larger companies, who were the early adopters of this technology, have reported that having AI-driven data visualization has given them more accuracy and better ability to plan going forward.
FP&A Is About More Than Finance
Decisions in all areas of your company can affect business outcomes. Your FP&A team’s strategic planning can have an impact that bridges departmental silos, improving outcomes in daily operations and increasing flexibility across the organization. But how can the financial team marshal its mountain of data to have the most effective impact on your company? It’s simple—by combining financial data and strategy with overall company goals. Do the KPIs, budgets, and business projections coming from finance match up effectively with these goals? If not, informed changes are in order. FP&A can use cutting-edge algorithms to map data-driven forecasts, allowing for agile shifts in strategy to keep the numbers in line with core goals of the business. In the end, money becomes a strategic tool serving core aspirations of the entire company.
Better Forecasting with Machine Learning
Forecasting in the past, crunching numbers and juggling spreadsheets, is not an option for today’s businesses. With Machine Learning—one facet of AI—software can process enormous amounts of data and use it to make informed projections about the future that actually become more accurate over time. Your company needs to navigate a rapidly-changing business world full of uncertainties, and Machine Learning can give you an accurate picture much faster and using more information that manual data analysis ever could. Automated forecasting models can be scheduled to perform calculations involving huge amounts of data at lightning speed, allowing your financial team to engage in strategy and communication.
Freedom for Financial Planning
According to the traditional model, financial analysts spend their time buried in numbers, performing traditional calculations and drawing up budgets. Along with providing better forecasting, Machine Learning creates a foundation of solid, usable information and forecasting. This frees up your financial team to think beyond the numbers, analyzing business drivers and economic realities that could impact your company’s success. Not only that—now they can spend more time engaging with other teams and implementing financially-informed strategy across the company. All in all, Machine Learning allows FP&A teams to remain more available, adding more value to the company as a whole.
Where Should I Go for Help?
An effective partner in utilizing AI and Machine Learning to make the most out of financial and non-financial, internal and external data will be able to do the following:
- Map the external and internal drivers that will have the most effect on company success, from sales forecasts to competitor prices to industry currents.
- Bring the most current technologies to the fore in creating valuable analytics, insights, and forecasts, processing big data, and implementing automation in the form of AI and Machine Learning. They should be able to generate optimal reporting, create effective business intelligence, and aid in all areas of data engineering.
- Assist your enterprise in bringing digital approaches into all aspects of company operations, adding value across the organization.
The Future is Here
Now is the time to embrace the newest technology for your financial planning. Armed with financial and non-financial data, with AI and Machine Learning at hand, financial analysts are more integrated into the goals, strategy, and daily operations of companies. Embrace the future to map the future and bring more success to your enterprise.
McKinsey & Company found out that technologies can fully automate 42% of the financial activities. However, is technology alone the key to play a strategic role in your organization? The Economist Intelligence Unit conducted that modern financial executives need to drive new priorities to become the driver of strategic decisions. Download their report for more on “Steering through Collaboration: CFOs driving new priorities for the future”.
- Financial Management for the Digital Age: Transform your finance function with forward-looking analyses and real-time business insights.
- Intelligent Cloud ERP: Ensure your business is ready for the future with SAP S/4HANA Cloud.