Simplified Financial Planning, Part III: The Future of Financial Planning and Analysis is Closer Than You Think
In the previous posts in this series, we reviewed survey data from a report by the CFO Research and SAP titled “The Future of Financial Planning and Analysis.” This detailed report covered what finance executives are saying about their current FP&A mandate and the role of data, technology and right solutions in making quicker, better and more accurate business decisions. In this final installment, we look at three of the top priorities for CFO’s and other finance executives.
New IT Systems That Can Handle the Flood of Data
The demands for real-time, ad-hoc analysis in FP&A are overwhelming existing IT systems. Finance leaders suggest that that current systems will fall even further behind as these demands grow. A majority have been unable to plan as they would like due to short turnaround times. Nearly all agree that they need faster and more responsive infrastructure for the next wave of big data. In the CFO Research study, the results show that:
- Over half (56 percent) of finance executives are not satisfied with the scope and granularity of data due to system constraints and time pressure.
- Just over 53 percent admit to jettisoning some complexity during “what-if” projections and risk modeling to get actionable advice quick enough to be effective.
- A full 93 percent say that focusing on increasing speed and responsiveness will have the biggest impact on their bottom line.
Tighter Integration of Financial Planning Software with Core ERP
Instinct and experience can only take you so far in a turbulent environment. Data-based decision making software is becoming a critical tool. Financial execs report that they rely heavily on decision support software that already integrates their financial planning systems with their enterprise resource planning (ERP) systems. From the CFO Research survey data, it’s clear that the majority of financial leaders recognize the significance of ERP integration:
- 82 percent of financial leaders who say their financial planning systems are already integrated with core ERP systems confirm that they rely on this tech to support their decisions.
- In comparison, only 41 percent of those with financial-planning systems that are “fairly well integrated with core ERP systems, requiring some data migration” say that their systems substantially contribute to decision-support abilities.
The companies that have already integrated their financial planning systems with core ERP systems are winning in that they are better able to support effective decision making.
More Flexible and Responsive Systems
Looking into the future, financial leaders expect business users to demand greater contributions from high-value FP&A projections through 2017. Decision makers will want to dive into the numbers themselves with interactive reports and projections that reach further into the future.
Providing that level of depth in planning, analysis and reporting will grow in importance as a business need that requires higher and more effective contribution from the finance function. Here are two more fascinating predictions from financial executives that have emerged from the CFO Research survey:
- In the near future, information and analysis systems will need to be simpler to use, but also more sophisticated and interactive with longer-range validity.
- 88 percent of financial leaders say that decision makers in their enterprise want a better understanding of the analysis they receive and they want finance to simplify it for them.
Finance executives are already striving to help other business users make the best decisions with the analysis that they provide. In results from this survey, finance leaders expect that this trend will expand across the enterprise in the future.
How to Build on Financial Success
Success in this turbulent new economic landscape depends on access to higher quality data and analysis tools. Finance experts need more far-reaching projections that can be presented simply and clearly to their colleagues for better decision making. Start now from Finance Solution content hub, and find more details on EPM in the cloud, collaborative analytics and advice on how to best communicate reporting data. The right financial planning places a CFO in the position of a trusted adviser who can see beyond the chaos in the marketplace.