Digital FP&A is Paving the Way for Future Growth
Allan Saffy, Executive: Financial Planning & Analysis, Decision Inc.
Today’s Financial Planning and Analysis (FP&A) professionals face a unique set of challenges: increase revenue, minimise costs, and align with the overall business strategy. These goals come to the finance team from CFOs under pressure to provide accurate and timely reporting as well as insightful, intelligent analysis to support executive decision making.
However, because of outdated systems and manual processes, many FP&A professionals struggle to rise to the task.
Time is Money
More and more, corporate decision-makers rely on their finance teams for simple, easy-to-interpret strategic recommendations. Yet for many FP&A professionals, routine work saps the time that could be spent on value-adding analysis. Manual processes such as gathering data, generating reports and processing data in Excel workbooks are all to blame and eat into the time that could be spent on higher-level strategic tasks.
For many companies, the presence of multiple systems, each using different data sets, formats and definitions, is what slows down the finance team. Other causes include:
• Outdated, manual processes
• The need for numerous consolidations – a process of leads and lags. By the time the report is generated, it may be outdated
• Lack of report standardisation
According to a recent PWC benchmark study, the average finance team spends nearly twice as much time gathering data as on analysis. Research also shows that nearly half of companies use reporting processes that rely on manual spreadsheet manipulation.
The Race is On
In today’s always-on business world, access to up-to-date information is critical, and the ability to link real-time operational performance to business strategy separates leaders and laggards. Yet, many companies still report using historic data – meaning current market conditions are easily overlooked. Where data and report generation is slow, predictive analysis may also take strain. Over 53% of the respondents in a Digitalist Magazine survey noted that it is complex to generate a what-if analysis quickly enough to get effective, actionable advice.
Bridging the Digital Divide
It is for these reasons that leading-edge companies are looking ever more to digital FP&A solutions, harnessing automation, consolidation and digitisation to pave the way for a new era of growth. By harnessing tech-first environments where the finance team is freed up to spend more time analysing data than gathering it, there’s greater latitude to formulate market-leading strategies.
Moreover, by using AI-led predictive analysis rather than relying on gut instincts and experience, forward-thinking companies also make faster, better-informed decisions.
Some of the benefits of leading-edge digital FP&A systems include:
• The ability to perform real-time analysis, using both external and internal data
• Increased accountability
• Integrated perspectives of past, present and future performance
• Real-time monitoring for compliance
• A common strategic vision
• Integrated automation solutions that bring together cognitive, big data, machine learning, and artificial intelligence
• Standardisation at a global level
• Strong benchmarking capabilities
• Cognitive tools with predictive and prescriptive insights
• Support for ad-hoc reporting and unstructured data
Digital FP&A offers another upside: it is a non-disruptive solution that complements existing systems and tools. Hence, enterprises are not required to get rid of or replace their existing tools and systems. Rather, digital FP&A extracts data from existing systems and even external databases (including ERPs, excel sheets, websites, data warehouses, business intelligence tools and more) to provide real-time, cognitive, prescriptive and predictive insights with a minimum of manual effort throughout the year.
With its far-reaching effects, digital FP&A is more than mere technology, processes and systems. It’s a holistic solution for driving business results now, and for years to come.
It’s an exciting time in FP&A.