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.
A lot of challenges have unfolded for business professionals in the last 12 months. This year’s trend report reflects these changes, which bring both challenges and opportunities for better business performance:
1. Adaptability is the new stability
Nothing has taught us how to pivot better than the last three years. In times of great uncertainty, technology will support organizations to adapt quickly to change through its ability to provide easy access to real-time insights. Organizations who have quickly adopted technological solutions and have accelerated digitization initiatives are well-positioned to take advantage of the time and cost-savings these endeavors bring.
While uncertainty is growing, organizations can adapt to these changes in multiple ways through more frequent forecasts, closer collaboration between the business and FP&A teams, the ability to model multiple scenarios and integrating external data sources. In short, adaptability will be the new stability in 2023.
2. Integrated Business Planning will give rise to 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 entire organization and streamline collaboration between people and technology. Organizations that adopt an integrated approach can create a unified plan and single source of truth activated by all the data that matters in finance, sales, marketing, and HR.
3. Simplified planning enables a culture of decisiveness and confidence
To lead resilient organizations, 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 leaders strive to achieve; however, confidence comes not simply from the presence of data, but from a meaningful understanding of what the data means for teams and organizations. No matter the size or amount of data at hand, simplified planning will be key to achieving decisiveness.
4. AI is mature and omnipresent in the Office of Finance
We are utterly immersed in AI, and it is already impacting our lives in powerful and exciting ways. A recent study by the Business Application Research Center (BARC) revealed that in the span of just two years, the percentage of organizations relying on predictive planning technology has increased elevenfold to 44%.
According to Forbes, AI is responsible for filtering irrelevant and potentially dangerous messages from our inbox. It personalizes our social media feeds and helps Amazon curate our online shopping experience. It powers the recommendation and personalization algorithms that Netflix uses to produce and serve relevant and compelling content. It populates closed captions and subtitles in PowerPoint to make presentations more accessible.
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.
5. Technology is a talent magnet
According to a study by Future Forum, embracing digital tools is a key component in building connections with employees. Consistent with quarter-over-quarter findings, people who work at companies they consider technology innovators continue to show higher employee experience scores in all categories, including 1.5x higher scores on productivity, 2x higher scores on a sense of belonging, and 2.5x higher scores on overall satisfaction.
Smart businesses attract smart talent. They equip their employees with powerful planning tools. Those that do not will risk losing or not attracting the best talent at all. Emerging finance professionals want to have the best tools available to them so they are positioned for success. Providing the right solutions to do that will increase the likelihood of employee engagement for everyone.
Financial planning and analysis (FP&A) is evolving into a whole new area of influence with cross-departmental and cross-dimensional impact.
6. FP&A professionals strengthen their roles as 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 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 did not know was possible. This year will call for superior planning capabilities, something we call Superplännen.
7. Geopolitics will continue to exert its influence over inputs and planning
Global organizations need to consider geopolitics, especially given the impact the war in Ukraine continues to have on the global 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 activity.
Finance professionals can partner with the broader business to determine which geopolitical scenarios could impact their organization’s business activities, customers, revenue, office locations, etc. and build these scenarios into their planning process.
A look ahead
Organizations that are positioned with superior planning capabilities will be able to adapt quickly to the changing business environment, thereby simplifying the overall planning process. Castles cannot be built on shifting sand, but rather on a solid foundation.
Ones that embrace proper digital solutions will not only have happier employees, but 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. The future is here. Those who embrace it fully with the right solutions in place will have a bright one indeed.
Dr. Björn Schmidt is Chief Finance Officer at Jedox, the most adaptable planning and performance management platform serving the integrated business planning needs of organizations across the world. As a next-gen CFO, Schmidt is an operationally focused finance leader with roots in tech investment banking and venture capital. For over a decade, he has helped propel companies in technology and SaaS to both imagine and achieve their full potential.
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