When discussing the future of intelligent financial planning & analysis (FP&A), I am reminded of the theme song from my high school graduation, Timbuk3’s “The Future’s So Bright, I Gotta Wear Shades.” That is how I honestly feel about the trajectory of the FP&A profession. I believe we are finally at a point where we not only possess the tools to take FP&A to new heights, but FP&A will have to soar for organizations to thrive in the 21st century.
If you survey the global FP&A profession, as I have done, it appears that we are at a true inflection point (some would say a point of precarious balance). Because of the advances we have made and will continue to make in technology, the role of the FP&A professional and the composition of the job itself will be dramatically different in a few short years. This progress will greatly impact what we do, how we do it, and the speed at which we do it, and provide a tremendous expansion of the depth and breadth of the analysis that can be performed.
Advanced Analytics and Forecasting
We will continue to witness the expanded use of advanced data analytics and forecasting. While the use of advanced analytics is certainly in the active take-up mode worldwide, in the very near future, advanced analytics will merely be table stakes for truly successful companies. The vastness of the data now available, and access to it practically in real time, make the use of advanced analytics a requirement, not a luxury.
The benefits to the FP&A professional include more efficient processes, lower costs over time, improved decision-making, and the ability to answer questions about the performance of the organization at a more strategic level.
Robotic Process Automation
In that vein, an area that holds great interest to me is the field of robotic process automation (RPA). Organizations are growing in their understanding of the technology involved and the potential benefits it has to offer. The current adoption rate is developing, with tremendous upside potential.
When we speak of RPA, we are not talking about hulking mechanical robots on an assembly line. RPA in the finance world is simply computer code. With the promise of low-value, transaction-focused work done by a resource that has little overhead, basic data analysis and number-crunching completed accurately in less time, and a perfect audit trail – there’s no doubt about it.
While we celebrate the increased productivity benefits with RPA, we also face some big challenges. Chief among them include evaluating whether our FP&A teams, and possibly the entire workforce, will be able to make the shift to the new skills that will be needed. Companies will have to make sure that their people possess the proper skills and abilities to execute the analytics, modeling, and forecasting to be performed with the data that are germane to the organization’s strategic goals. How can organizations develop truly first-class and intuitive interaction platforms between humans and machines?
Further, there will be large amounts of unstructured data that need to be scrubbed, which is costly and time-consuming. We will never get away from the critical importance of master data management.
In my next article about the future of FP&A, I will touch on the cloud and software-as-a-service, artificial intelligence, business intelligence, and machine learning. And I’ll focus on the human side of this wonderful metamorphosis we will experience in the not-too-distant future.