To stay ahead of your competition, top FP&A (financial planning and analysis) trends are listed below one by one.
As we all know that our whole life has been impacted by technology in every aspect of it. From the personal to professional level, it is impossible to imagine life without it.
Professionals in financial planning and analysis (FP&A), increasingly rely on technology to improve their day-to-day workflow. Finance professionals need to be able to see the numbers and make informed decisions.
As global inflation, geopolitical tensions, and disruptions in supply chains continue to disrupt the global economy, so needs integrated, accurate, and frequent business planning.
These are the eight emerging trends in FP&A (financial planning and analysis) technology.
1. For Integrated Business Planning to Work, You Need Stronger Collaboration Teams
The next generation of data-driven planning has been launched by Integrated Business Planning (IBP). It is based on technological advancements that allow for stronger cross-functional collaboration.
Information silos are not the best way to make business decisions.
It is difficult and costly to manually combine data from different parts of the company - product, supply, and financials.
Technology meets the growing need for cross-departmental decision-making.
FP&A (financial planning and analysis) has gotten into areas that are not finance and required integrated data from the entire organization.
IBP has also simplified collaboration between technology and people.
An integrated approach to business can help create a single source of truth and a unified plan for all departments, including finance, sales, and marketing.
We have become more dependent on hybrid and remote work solutions that allow teams to spread across different time zones. 24-hour access to cloud-based data sets is the norm.
2. AI has Reached, Even in the Finance Department
Artificial intelligence is everywhere. AI is everywhere. From spam control filters in Gmail to pre-populated email responses to algorithm-based personalization on our favorite streaming site, AI has touched almost every aspect of our everyday lives.
A recent BARC study found that predictive planning technology has seen a dramatic increase in use in corporate planning, jumping from 4% to 44% within two years.
A recent Dresner Market StudyOpens a new window Enterprise performance management (EPM), which has seen a 54% increase in usage, compared to 51% in 2021.
The top three planning priorities, annual budgets, cash flow forecasting, and headcount planning, remain the same as in 2021. However, tech-based strategic planning is growing in importance.
Technically, AI is mature and stable. It's ready to help the finance office.
It is helping CFOs deliver the advanced insights business leaders and investors demand from them. Future decision-making will be more data-driven and AI-driven.
3. Automation is Crucial Now
According to the joint research Opens a new window between Salesforce and McKinsey Global Institute, forty percent of the traditional sales tasks can now be automated. This could increase to half as technology, particularly natural language processing, improves.
According to the 2022 EY Parthenon research Opens another window, organizations are rapidly changing their digital identities and making record-breaking investments in 2022. This is up 65% compared to just two years ago.
4. Technology is an Attraction to Young Talent
Welcome to FP&A (financial planning and analysis) 3.0. Young talent is increasingly attracted to technology by digital natives who are flooding the workforce.
In a recent study Opens a new window from Future Forum and found that digital tools are crucial for building relationships with employees.
Quarter-over-quarter results show that employees who work for companies that are considered technology innovators have higher employee engagement rankings in every category, including 1.5x higher rankings for productivity, 2x higher rankings on a sense of belonging, and 2.5x higher rankings for overall satisfaction.
Smart businesses provide their employees with powerful, tech-based planning tools that make their jobs easier.
Financial professionals in the future expect to have access to the best tools available to meet their job requirements.
The right solutions will increase employee engagement and decrease the risk of severe employee loss.
5. FP&A Professionals are Valued Business Partners
An organization must be able to plan and adapt to be resilient. FP&A (financial planning and analysis) professionals play a key role in maintaining these capabilities across the enterprise. These times call for flexible planning that allows for adaptability in all areas of the organization, including finance and operations.
Team members will feel exhilarated and satisfied when they move from silos to integrated planning (IBP). This allows them to work smarter, collaborate better, be more decisive, and hit the mark so that they can discover what was impossible.
6. Geopolitics and Technology are Interlinked
Geopolitics is something global organizations must consider, particularly given the continuing impact of the war in Ukraine on the global supply chain.
This environment allows countries to take different approaches to how and when they will engage on the global stage. Organizations can be affected depending on their location and business activities.
Finance professionals can use technology to collaborate with other business leaders to identify which geopolitical situations could affect their company's customers, revenue, business activities, and office locations. They can also incorporate these scenarios into their planning process.
7. Leaders Require Skills to Pull Value From Data
All data is not created equal. Also, not all data sets are relevant to the enterprise.
A recent Statista analysisOpens a new window shows that 181 zettabytes will exist by 2025. This is an increase from 120 zettabytes at the end of 2023.
The world is moving at an unprecedented pace. Although organizations have an abundance of information available to them, it is still difficult for them to make sense of it and use it to improve their daily operations and processes.
Financial leaders need to have new skills to interpret the data. However, organizations are embracing sophisticated analytics to make historical data predictive.
They can spot trends and risks, which allows teams to quickly take action. Technology is enabling faster and more accurate data-driven decision-making by collapsing the past and future into the present.
8. Simple Forecasting Capabilities Lead to Decisiveness
Leaders who can confidently forecast and make quick, accurate, and precise decisions are essential for resilient organizations. Not only is data available, but also a clear understanding of its implications and how it can be used to build confidence.
It is also possible to use the same terminology across all locations and within an organization, which results in a consistent and transparent interpretation of a forecast.
Technology can make accuracy much easier if you rely on it to do the hard work. A simplified forecast, regardless of how large the data is, will allow for a culture that inspires decisiveness and confidence within every organization.
AI-Powered FP&A (financial planning and analysis) Success
Superior planning skills will enable organizations to quickly adapt to changing business environments. This will simplify the planning process and allow them to be more agile in the volatile market.
Leaders will be able to make faster and more accurate decisions with the help of AI and automation.
Digital solutions can make employees happier and increase business success.
AI will play an important role in empowering both finance and tech professionals to be more strategic business partners. 2023 is almost here.
The best people are better prepared to handle volatile environments.
AI-empowered FP&A (financial planning and analysis) can lead to success by providing more accurate and efficient forecasting, budgeting, and decision-making.
The use of machine learning and natural language processing techniques can help automatically extract and analyze data from various sources, identify trends and patterns, and generate insights that would be difficult or time-consuming for humans to uncover.
This can help businesses make more informed decisions and achieve better financial outcomes.