Aberdeen Group research identifies 3 key requirements for next generation FP&A cloud solutions
According to Aberdeen Group research in August 20141 the single biggest issue facing companies is that their current planning, budgeting, and forecasting processes are too difficult and long-winded. Plus, with markets as volatile as they are, it is increasingly difficult to predict outcomes, which significantly decreases accuracy.
However, there are companies that are bucking the trend. In Aberdeen’s 2014 Financial Planning, Budgeting, and Forecasting and Enterprise Performance Management benchmark survey the variance between actual costs and budgeted costs at Best-in-Class companies was 4%, compared to an industry average of 11% and 35% for laggards. Similarly the variance between actual revenue and forecasted revenue at Best-in-Class companies was 3%, compared to an industry average of 11% and 37% for laggards.
So what is the reason? It turns out that cloud solutions may be playing a significant part. According to other Aberdeen Group research1, Best-in-Class companies are currently more likely than all others to utilize a cloud financial application, which points the way for organizations that want to overcome the issues of their current Financial Planning and Analysis (FP&A) processes.
But helpful though these FP&A cloud solutions are, users still want more from them and Aberdeen identified three key requirements that users will demand from the next generation of FP&A cloud applications:-
- The first is having business analytics embedded into the solution. Business analytics allow users to develop ‘what-if’ scenarios in order to identify potential outcomes, taking much of the guesswork out of the planning process.
- The second is in-memory analytics. Using this technology users can analyze more data, from a greater number of sources, faster than ever before. As a result, they can run more in-depth analyses more often, which is particularly useful when companies are faced with volatile business conditions.
- The third is having social collaboration capabilities. Embedding these in FP&A solutions allows users to make use of activity streams, automatic requests for information, and in-context roll up and roll down facilities, accelerating the whole FP&A process.
Join our webinar on Tuesday 9th June at 10.00am BST/11.00am CEST to learn how the SAP Cloud for Planning solution delivers the next generation of FP&A applications.
1Source: The next generation of cloud FP&A: simple, collaborative and real time, Aberdeen Group, August 2014