The world really has changed, and now most CFOs are talking less about what’s changed and more about how to leverage that change. Data continues to be the logical key to success. But, finding ways to use your growing mountains of data continues to boil down to continued digital transformation, the harnessing of artificial intelligence, and building smarter teams and business processes to take advantage of the changes in how work gets done. To keep you current, below are a few insights into how Finance and FP&A leaders are moving forward. We’ve found these articles helpful and we hope you do, too.
The New FP&A
Deloitte / WSJ: Business Orthodoxies to Challenge in 2021
Much has changed over the past year and many of those changes are here to stay. That puts CFOs in a unique position to rethink how Finance operates. Taking a broader, more proactive role within the company positions Finance to provide guidance on digital transformation, growth opportunities, diversity and inclusion, and even information sharing. “For CFOs, challenging these often deeply embedded viewpoints can lead to opportunities to create value and drive their finance agendas.”
Crafting the story behind the numbers has always been the job of FP&A. But, if you can spend more time working and collaborating with the business to actually create and manage those numbers, Finance can have more say in how the business operates and makes decisions. That’s especially helpful in today’s fast-changing and uncertain world. “(The business needs) an operating thought partner and not someone that is just keeping score.”
Diginomica: What FP&A teams need to know about AI/ML
More data isn’t always good, especially if it blocks the view of what’s really important. But, advances in artificial intelligence and machine learning (AI/ML) help sift through those mountains of data to surface important signals, especially for FP&A. These technologies are living up to the hype to improve financial forecasts, highlight anomalies, and provide increased decision-making confidence. “AI/ML applications not only save users hundreds of hours every month in manual labor, but also help craft logical, big picture stories about what’s really happening in the business.”
Harvard Business Review: How Midsize Companies Can Use Data to Compete with Digital Giants
Midsize companies might not have unlimited resources, but they do usually have the agility and speed necessary to beat bigger companies to the punch. These companies are finding that focus, alignment, and deft organizational management are what makes the difference, even if they don’t have the same data volumes as their larger competitors. “Use the data you have readily available to identify your profit peaks and profit drains and strategically align your organization around your profit core.”
Not so long ago, digital transformations were big, expensive, and disruptive. The cloud has changed that, and smart CFOs now view transformation as modular and targeted. Today, it’s relatively easy to transform or automate a single process and foster concrete business benefits in just a few weeks. And, in a short time, a few incremental improvements can create significant and lasting value. “Technology has evolved to allow for this more nimble, sequenced approach.”
Being data-driven is table stakes in business today. But, the resulting insights shouldn’t be kept just to Finance. Instead, financial data should be used as a springboard for working more closely with the business. “Gartner recommends organizations shift finance analytics from passive, standardized reporting to more engaging, relevant guidance that encourages dialogue and discussion.”
CFO Thought Leadership
Speed and agility are what’s going to separate the leaders from the laggards in 2021. New challenges and opportunities will constantly emerge, but only those who have the insights to act quickly will win. That gives the CFO an opening to become the strategic center of decision-making and growth. “Once considered a numbers-only role, Finance is now balancing traditional responsibilities with growing demand for data-driven analysis and insights, risk management and other key business functions.”
Bitcoin is fast becoming a household name and an interesting investment opportunity for businesses. We can thank Elon Musk for both. But, continued (and incredible) volatility is keeping CFOs from jumping on this digital currency bandwagon. At least for now. “Eighty-four percent of financial executives said this month that they do not plan to ever include bitcoin among their corporate assets.”
Stay Tuned for More Useful FP&A Content
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