Financial planning and analysis has traditionally focused on activities like planning, budgeting, forecasting, and performance management. The timeframe of the covid-19 and the challenges it posed have demonstrated how crucial it is to take advantage of the opportunities presented by digital transformation as well as cross-functional planning and analysis for more effective collaboration outside of the traditional remit of finance.
The demands placed on financial planning and forecasting by business stakeholders are evolving. Relevance, timeliness, and actionability are what they are aiming for because business steering depends on current financial plans. In order to support decision-making during a volatile period, finance teams were forced to turn to spreadsheets and financial modeling after the global pandemic exposed the flaws in conventional planning processes.
Race towards Data-Driven Processes
Data is becoming increasingly important to organizations' survival and growth. Numerous finance teams spend significant time sending, receiving, and collating spreadsheets. So much of their time is spent manually managing data. However, the uncomfortable truth is that far less time is spent realizing its true worth.
There is a fundamental shift when your financial planning and analysis (FP&A) becomes data-driven through automation and an intuitive platform with the right tools. The data flows freely, is reliable, and begins to work for you. Indeed, it has the potential to transform your organization, particularly when it comes to financial and business strategy decisions. But how do you get to this point?
Let’s run through 4 core vitals to get things done right:
Key Trends that will Drive FP&A:
FP&A Culture. FP&A professionals are switching beyond budgeting because budgeting does not produce the expected outcomes in the contemporary business environment. It doesn't imply that they are giving up on the budget.
With flexible budgeting techniques, more advanced target evaluation, and corporate performance management tools, they are literally changing the process. A process based on the key business drivers that are implemented through a flexible collaborative system.
FP&A People. Today's FP&A professionals are expected to handle a variety of tasks. Finding someone who can simultaneously play the roles of architect, analyst, storyteller, and influencer is extremely difficult. Due to the difficulty in hiring, as a result, many businesses decide to create FP&A teams where these roles are carried out by the team members.
Systems and Analytics. Advanced techniques are necessary because analytics is no longer straightforward and historical. Old models are being replaced by driver-based ones because Excel spreadsheets cannot keep up with the speed of the market's change.
Process and Design. The flexibility and dynamic nature of processes and design are growing. There isn't a universally effective recipe. Modern FP&A companies are innovative in how they redesign and transform their processes to fit the needs of the contemporary world.
Engaging the core vitals for adaptive and resilient FP&A processes is the first step of the business toward a modern, sustainable FP&A. As a result, businesses of all sizes and industries are adopting digital solutions and enhancing their agility through AI-based solutions. Adopting these trends will help businesses develop in ways that will better support long-term growth and financial stability.
Join the revolution with the right tools and robust analytics that foster resiliency, scalability and profitability with Softsensor AI.