According to the latest CFO Signals report from Deloitte:
“FP&A and management reporting are by far the functions that CFOs would most like to improve, with 63% of CFOs citing FP&A and 46% management reporting.”
Those CFO’s looking for improved management reporting are most likely being presented with information from BI tools and dashboards which focus on reporting ‘what’ has happened. What they’re missing is insight into ‘why’.
These same BI solutions are also not capable of carrying out financial planning and analysis. This leads to issues of control and a lack of centralisation. Where there are multiple sources of information within the business, if FP&A don’t provide the answers other functions want, they’re likely to revert to a different business intelligence tool or data set and make plans outside of finance, leaving the FP&A team cut off from the rest of the organisation.
As we exit the immediate crisis, we enter a period of further uncertainty as we wait to see how fast and how far markets are going to bounce back. In terms of providing actionable insight, there are further challenges for the FP&A function around efficiency and value creation.
Pressure on efficiency:
- Growing expectation of an increasing speed of response
- Exponential growth of data volume required to be processed, controlled and analysed
- Increasing volume and frequency of requests from business partners.
Pressure on value creation:
- Expectation of improvement in data quality – reliability and accuracy
- Expectation of better data insight
- Expectation of improved support in decision making.
Boost the FP&A team
The route to tackling these compound challenges and delivering what CFOs want lies in augmenting the capability of the FP&A function. To achieve this, they need to be equipped with tools that will reduce the manual effort required for gathering, consolidating and analysing data to free them to work with the rest of the business to drive insight.
Better provision for the FP&A team delivers critical benefits:
- Saves time. Uncover the root cause of conditions like customer churn, sales revenue or growth margin drop without financial controllers having to analyse the information and produce reports.
- Improves informed decision making. The artificial intelligence (AI) associated with superior BI solutions can automatically analyse all available data rather than just a portion as is often the case. This capability provides access to insights that would not otherwise be available, improving the decision-making process.
- Increases speed. With better access to valuable insight, the business can make decisions and enact critical moves in a fraction of the time previously required. Speed has always been a competitive advantage, but never more so than in the current situation – it is crucial to be able to seize opportunities and avoid pitfalls, and fast.
- Democratises data access. Using natural language queries (made possible by AI), these tools increase the range of employees in the organisation who can intuitively find answers for themselves and extract insights from the data. This improves data literacy and transparency across the business and releases more time for the FP&A team.
Reaching the point where your FP&A activity is proactive, insight-driven and integrated across your wider business is more accessible than you might realise. It doesn’t take an enterprise solution to equip your team with the tools required to reach this position – the foundations of a strong system for your FP&A activities can be achieved within the capability of Planning Analytics on Demand.