Financial planning and analysis (FP&A) is evolving into a whole new area of influence with cross-departmental and cross-dimensional impact. Accurate, frequent, and integrated business planning is crucial as geopolitical tensions, worldwide inflation, and supply chain disruption continue to reshape the global economy. We have identified 7 FP&A trends that are top of mind here at Jedox and with our customers and Partners around the world.
Table of Contents
Adaptability is the new stability
Integrated business planning creates more meaningful collaboration
Simplified planning enables a culture of decisiveness and confidence
Artificial intelligence is a mature technology that will increasingly support the finance organization
Technology is a talent magnet
FP&A professionals are key business partners
Geopolitics continues to influence inputs and planning
1. Adaptability is the new stability
Rather than thinking of stability as achieving a level of comfort and continuity, FP&A teams should instead aspire to create comfort by improving their ability to adapt to an environment of constant upheaval. In times of uncertainty and change, technology can drive our ability to adapt quickly. Organizations that have accelerated digital transformation and invested in upskilling their talent to embrace this transformation may find themselves in a better position to leverage the full potential of their tech investments. Even in a highly uncertain environment, organizations can adapt more easily by conducting more frequent financial forecasts, modeling multiple scenarios, integrating external data sources, and building closer collaboration between the business and FP&A teams.
2. Integrated business planning creates more meaningful collaboration
Integrated business planning (IBP) is the next generation of decisive planning, with technology-driven cross-functional collaboration at its core. FP&A is evolving beyond finance to integrate information from across the enterprise and streamline the collaboration between people and technology. Geopolitical tensions could cause rapid change across the economy, requiring organizations to change strategies quickly, re-forecast often, and use multiple scenario planning with all information available. IBP allows for tighter collaboration between team members and more trustworthy forecasts and outputs. McKinsey found that integrated business planning is a business-wide initiative supported by the continuous engagement between technology, process, and people that can significantly reduce the number of surprises a business faces.
3. Simplified planning enables a culture of decisiveness and confidence
To drive resilient organizations, business leaders must be confident in their plan so they can act with accuracy and precision. The ability to make decisions with confidence and speed is a goal that many strive to achieve; however, confidence comes not simply from access to data but from a meaningful understanding of what the data means. No matter the size or amount of data at hand, a plan that is simplified is a plan that will enable a culture of decisiveness and confidence.
4. Artificial intelligence will increasingly support the finance organization
Artificial intelligence (AI) is already impacting our daily lives in powerful and exciting ways. AI filters spam from our inboxes, personalizes our social media feeds, and helps Amazon curate our online shopping experience. A recent study by the Business Application Research Center (BARC) revealed that, in just two years, productive use of predictive planning technology in corporate planning had increased nearly 7x from 4% in 2020 to 27% in 2022. From a technical perspective, AI is stable, mature, and ready to support the finance organization. From a strategic perspective, it is helping CFOs provide the sophisticated insights and data that business leaders and investors demand. Driven by a demand for more data-driven decisions, investment in AI can help improve investor confidence, decisiveness, and forecast accuracy: all important factors in this period of continued uncertainty.
5. Technology is a talent magnet
According to a recent EY CFO Roundtable, one in five CFOs is focused on workforce and talent retention. In a competitive job market, technology should be thought of as a talent lever – a way to attract the very best and brightest to the team and keep current team members engaged and satisfied in their work. A survey by LinkedIn found that employees value work-life balance and upskilling, and smart organizations can attract and retain talent by deploying technology that makes jobs easier and promotes professional development. Many finance professionals want to be positioned for success and develop into strategic leaders in the organization, and therefore need to be equipped with advanced planning tools that enable them to do their best work.
6. FP&A professionals are key business partners
For an organization to be resilient, it must be adaptable, and FP&A professionals have a strategic and valuable role to play in integrating adaptable planning capabilities throughout their organizations. More economic uncertainty demands closer partnering between FP&A professionals and the broader organization. FP&A professionals must embrace their role as strategic advisor to their organization and co-create strategies for managing and planning in today’s volatile environment. Moving from siloed to integrated business planning gives teams the exhilarating and satisfying feeling of working smarter, collaborating better, being decisive, and hitting the mark. At Jedox, we call this feeling Superplännen.
7. Geopolitics continues to influence inputs and planning
In the EY CEO Survey 2022, more than half of the CEOs surveyed cited geopolitical tension as a challenge for their organization. Global organizations need to consider geopolitics in their planning process, especially given the impact the ongoing war in Ukraine continues to have on the worldwide economy. The policies of various countries and the approaches they are taking in response to geopolitical uncertainty can profoundly impact an organization, depending on where it is based and where it conducts business activities. Multiple scenario planning can help organizations better prepare for these impacts when they arise and respond to geopolitical consequences and ensure a more accurate forecast based on the changing economic conditions.
Financial planning and analysis teams continue to increase their influence across the enterprise as champions and stewards of integrated business planning. Accurate, frequent, and integrated business planning has become mission critical as geopolitical tensions, worldwide inflation, and supply chain disruption reshape the global economy. Organizations that embrace and deploy digital planning capabilities will be able to adapt quickly and simplify planning processes amid continued uncertainty and macroeconomic headwinds.
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