2021 will be an interesting year for businesses looking to come back from the COVID-19 pandemic, which changed so much throughout 2020 and delivered a truly unpredictable impact to industries and markets across the globe. Already, we are seeing Financial Planning & Analytics (FP&A) trends coming from organizations that appear to be recovering faster than others. Underpinning these trends is decision-making software and technologies that empower businesses to plan, analyze, and predict as part of their finance process.
Last year, we made our predictions based on – what we saw as – a seriously needed evolution to reshape the Office of Finance, led by FP&A. This year, taking a hard look at the COVID-19 disruptions, it is clear that even the most established enterprises are no longer able to sit back and must, to remain competitive, challenge the legacy processes that permeate throughout their financial and wider business ways of working. Digital transformation is the key to overcoming these challenges. Read on to discover the five key drivers we believe will significantly shape FP&A this year.
Automating simple processes and tasks, such as data entry, can add up to an incredible saving of time. For example, manually adding new financial information to a spreadsheet might take several hours of work each week. With a software solution that can undertake this task and process data in a matter of seconds, the savings in time are clear. Across the Office of Finance, there is an abundance of opportunities to automate.
Saving time by adding a level of automation to processes like planning & control, management reporting, financial closing, consolidation, and disclosure enables users to spend more time doing analysis and understanding data, rather than just managing it.
The impact of COVID-19 is a massive factor for businesses to fully understand and overcome. It has highlighted, in many cases, a direct need for business decisions to be made quickly and accurately. To support this, organizations must have a platform that delivers accurate scenario planning and modeling to help navigate through uncertain times and prepare for all eventualities.
The right technology will enable this by linking all operational data across the entire organization to build scenario models against. Short- and long-term strategies can be plotted and the best, most profitable, paths can be defined.
Traditional budgeting processes, where budgets are based on spending and trends from the previous year, have little justification when looking back at a year as disruptive as 2020. Instead, businesses should look at reinventing their budgeting process with a Zero-Based Budgeting (ZBB) approach.
Going one step further, combining this approach with driver-based planning, where financial figures are linked to operational drivers, ZBB can be the first step in FP&A transformation, giving finance teams a holistic overview of how each business initiative or strategy can impact across the organization.
In the modern world, companies are turning to finance professionals to offer more to the business by being decision-making leaders across business strategy, finances, and operations. In this sense, powerful data analysis and Business Intelligence (BI) have become more essential than ever before.
The Digital Boardroom, then, is a potent tool for financial professionals and C-suite executives to implement. By digitally transforming the boardroom approach, where data from across the organization is presented as a single source of truth, senior executives are given accurate, real-time information that can be used to identify opportunities for growth, efficiency gains, and performance enhancements across the business.
It may come as little surprise that financial tasks requiring heavy data work, constant reviewing, and eventual sign-off, can be lengthy and highly laborious for finance professionals. This way of working simply does not fit into the modern, connected world of 2021. Instead, organizations must operate with a highly collaborative approach – especially since remote working has been forced on many businesses, following the pandemic – with a standardized approval workflow to ensure everything is delivered in a timely manner.
The right software solution will enable this, offering a platform that is transparent across the entire organization, with everyone working from the same real–time data to ensure business goals are aligned.
To expand on the FP&A trends specified above and to discover the key drivers changing the face of FP&A in 2021, download the full whitepaper.
Digital transformation in finance (and the entire organization) has never been more vital. Discover five key drivers which are significantly shaping FP&A in 2021