Top 8 FP&A Tech Trends for 2023
Top financial planning and analysis trends to stay ahead of the competition.
Technology has infiltrated every aspect of our lives – from the personal to the professional, we simply cannot imagine ever living without it again. Financial planning and analysis (FP&A) professionals increasingly rely on the power technology can bring to their daily workflow. Vladislav Maličević, CTO of Jedox, shares the top FP&A trends to follow to stay ahead of the curve.
Coincident with the evolving role of technology is also FP&A professionals’ increased influence on cross-departmental and cross-dimensional decisions. From HR to sales and marketing, finance professionals must have an overview not only of the numbers but also of the decisions based on them. The need for accurate, frequent, and integrated business planning has heightened as geopolitical tensions, worldwide inflation, and supply chain disruption continue to reshape the global economy. In view of these challenges, eight trends for FP&A technology have emerged.
1. Integrated Business Planning Requires Stronger Collaborative Teams
Integrated business planning (IBP) has launched the next generation of data-driven planning based on technological advances that lead to stronger cross-functional collaboration. Trying to drive business decisions based on information silos lacks depth and breadth. Unifying data manually from across the organization – supply, demand, product, and financials – is onerous and error-prone. Technology fulfills the rising need for cross-departmental decision-making. FP&A, in particular, has seeped into areas beyond finance that required integrated data drawn from across the entire organization.
At the same time, IBP has streamlined collaboration between people and technology. Organizations adopting an integrated approach can create a unified plan and single source of truth activated by all the data related to finance, sales, marketing, and HR. Given our increased reliance on remote and hybrid work solutions that allow teams to spread across multiple time zones, 24-hour access to cloud-based data sets has become the new norm.
2. AI Has Arrived, Even in the Office of Finance
AI is everywhere. From spam control filters in our Gmail accounts to pre-populated email responses and algorithm-based personalization on our favorite streaming platform, AI has touched nearly every aspect of our daily lives. According to a recent BARC study, the use of predictive planning technology in corporate planning has skyrocketed from 4% to 44% in just two years.
The use of enterprise performance management (EPM) software has also increased to 54%, up from 51% in 2021, according to a recent Dresner market study. The top three planning priorities of annual budgets, cash flow forecasting and headcount planning remain unchanged from 2021, with tech-based strategic planning rising in importance. From a technical perspective, AI is stable, mature, and ready to support the office of finance. From a strategic perspective, it is helping CFOs provide the sophisticated insights that business leaders and investors are demanding. The future will move from data-driven to AI-driven decision-making processes.
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3. Automation Is a Must-have
Forty percent of traditional sales tasks within an organization can now be automated – which could rise to 50% as technology, especially natural language processing, advances, according to the joint research between Salesforce and the McKinsey Global Institute.
Meanwhile, organizations are rapidly transforming themselves digitally, making record-breaking investments in 2022, up 65% from just two years ago, according to 2022 EY-Parthenon research. These investments, coupled with meeting the expectations and digital nascence of younger generations of talent, amount to an evolving sales organization that is increasingly predictable, scalable, and transparent.
4. Technology Is an Attractor for Young Talent
Welcome to FP&A 3.0. As digital natives flood the workforce, young talent looks to technology as commonplace to manage their daily tasks. According to a recent study by Future Forum, digital tools are essential for building connections with employees.
Consistent with quarter-over-quarter findings, people who work at companies they consider technology innovators continue to show higher employee engagement rankings in all categories, including 1.5x higher rankings on productivity, 2x higher rankings on a sense of belonging, and 2.5x higher rankings on overall satisfaction. Smart businesses equip their employees with powerful tech-based planning tools to make their jobs easier. Emerging finance professionals expect access to the best tools on the market to fulfill their job requirements. Providing the right solutions to do that will increase the likelihood of employee engagement for everyone while decreasing the chance of severe employee attrition rates.
5. FP&A Professionals Become Valued Business Partners
For an organization to be resilient, it must have adaptable planning capabilities. As a result, FP&A professionals will play a strategic role in maintaining these capabilities throughout the enterprise. These turbulent times require solutions that enable adaptable planning not only in in finance but across other organizational functions such as sales, operations, workforce (HR), and supply chain.
Moving from silos to integrated business planning (IBP) gives teams the exhilarating and satisfying feeling of working smarter, collaborating better, being decisive, and hitting the mark so they can uncover what they didn’t know was possible. 2023 will call for superior planning capabilities, something we call Superplännen.
6. Geopolitics and Technology Get Even More Closely Interlinked
Global organizations need to consider geopolitics, especially given the impact the war in Ukraine continues to have on the global supply chain and the overall economy. In this environment, countries can take several different approaches to how they will respond and engage on the world stage, and this can impact organizations depending on where they are based and where they conduct business activities.
Using technology, finance professionals can partner with the broader business to determine which geopolitical scenarios could impact their organization’s business activities, customers, revenue, and office locations while building these scenarios into their planning process.
7. Leaders Need Skills to Generate Value from Data
Not all data is created equal. In other words, not every data set is relevant to the overall enterprise. According to a recent Statista analysis, 181 zettabytes of data will be in existence by the year 2025, up from 120 zettabytes by the end of 2023. We are living in an exponential age. Organizations have a wealth of information at their fingertips, but making sense of it and using it to advance their daily activities and processes are still works in progress.
Finance leaders require new tech skills to interpret the data generated. Nonetheless, more organizations are employing sophisticated analytics to make historical data more predictive. Therefore, they spot trends and risks, empowering teams to take meaningful action promptly. Technology is driving faster, more accurate data-driven decision-making by collapsing past and future into present time.
See more: AssetTech: All Roads Lead to a Data Platform
8. Decisiveness Emerges Through Simplified Forecasting Capabilities
Resilient organizations need leaders who are confident in their forecasts and can make accurate, precise, and quick decisions. This confidence comes not simply from the presence of data but from a meaningful understanding of the data and its implications.
It also comes from using the same terminology and language across an organization and all its locations, resulting in a clear, consistent, and transparent interpretation of a forecast. In addition, accuracy can improve greatly when relying on technology to do the grunt work for you. No matter the size of the data at hand, a forecast that is simplified is a forecast that will enable a culture of decisiveness and confidence in every organization.
AI-empowered FP&A Success
Organizations that have superior planning capabilities will be able to adapt quickly to the changing business environment, thereby simplifying the overall planning process while maintaining the nimbleness required in the current volatile market. Automation and AI-based solutions will help leaders make more accurate and faster decisions.
Organizations that embrace proper digital solutions will have happier employees and a better chance at business success in 2023. AI will play a key role in empowering finance and tech professionals alike to become more strategic business partners. 2023 is nearly here. Those equipped with the right solutions will be better equipped to weather volatile environments with more ease.
What FP&A trends are you most prepared for? How would they impact your enterprise? Share with us on Facebook, Twitter, and LinkedIn.
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