Remember when the financial planning and analysis (FP&A) function was fairly straightforward with fixed parameters? Generate quarterly and annual reports on historical financial data, produce budgets to equip the C-suite for enterprise-wide decisions, tick off a few scenario plans with interpretive commentary and glossy slides, and call it a day. (OK, a little simplistic, but you get the idea.) In the age of artificial intelligence (AI), FP&A looks oh-so-different.
The Future is Now
One study suggests that over the next four years, two-thirds of finance leaders believe their function will reach an autonomous state; 90% of descriptive and diagnostic analytics will be automated; and 50% of companies will replace bottom-up forecasting approaches with AI to nimbly adapt to market fluctuations and unexpected events. Even now, 80% of companies run daily, weekly, or monthly projections (up from 57% in 2020). That’s a lot of change in short order.
Ready or not, AI’s impact within FP&A applications is undeniable: simplifying complexity with persuasive storytelling, generating new knowledge, saving time. Start by making sure your data is clean, consistent, and structured. Hire FP&A talent with AI and machine learning (ML) skills or upskill your current teams. Empower them to study and recommend the right tools for your FP&A goals. Put your change management ducks in a row – including how to address your employees’ “change fatigue” (Priority #4 for CFOs in 2024) – and plan for continuous learning.
“Predicting rain doesn’t count. Building arks does.”
– Warren Buffett, American businessman and philanthropist
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