Finance teams are increasingly investing in new technologies and accessing more data sources to provide strategic insights and look ahead. A survey found that companies spending more on technology have more efficient processes and staff spend less time on routine work. While few companies currently have predictive analytics capabilities, half plan to acquire them. Access to integrated and external data sources allows more advanced analysis and modeling. The major trends are greater technology investments and data access to power analytics, freeing up finance for strategic work and enabling look into the future.

1. Finance: Forward Looking, Technology &
Data Driven
Nilly Essaides, Director & Practice Lead FP&A, Association for Financial Professionals
Published on October 31, 2016
Finance is increasingly looking forward. AFP’s FP&A Benchmarking Survey found that to stay
competitive, financial planning and analysis (FP&A) teams are adopting new tools and accessing
fresher, more diversified and integrated data to shorten the decision-making cycle and provide
management with insights so they can better plan for what lays ahead.
While many FP&A functions are still in the early adoption phase, most expect to possess these
capabilities and believe they’re absolutely necessary in order to stay competitive in the digital,
fast-changing, global marketplace. Key to becoming “future ready” is investing more in
technology on two levels:
1. To make the FP&A process more efficient, thus freeing up staff time to focus on more
strategic work and
2. To acquire more advanced analytics and access to real-time, diversified data so FP&A can
feed more sophisticated predictive and even prescriptive models.

2. FP&A Benchmarking Survey: Key Findings
Investing more in technology translates into more efficient processes and less grunt work.
Companies that invest more in technology as a percentage of their overall FP&A budget have
shorter core process cycle times and their staff spends less time processing and collecting data.
 Evidence: Companies that spent less than 10 percent on technology as part of their
overall budget said they take an average of almost 90 days to create the budget, 23 days
to build the financial forecast and nearly 16 days to complete a rolling forecast. In
contrast, companies that spent between 20 and 49 percent on systems did the same in 75,
16 and 12 days, respectively. This disparity shows that automation and streamlining of
core financial planning activities greatly reduces the time it takes to complete routine
activities. In addition, the average number of days FP&A staff spent on collecting and
processing data at companies that dedicated less than 10 percent of their budget to
technology was over 384—more than a full FTE year. In contrast, companies that spent
between 10-20 percent on systems cut that number in half.
FP&A is taking a better look forward. The survey shows that while a smaller percentage of
companies already have predictive modeling capabilities, half are planning to acquire them,
guaranteeing that they’ll be able to look further and more accurately into what’s likely to
happen next, and provide management and business leaders with invaluable intelligence so they
can plan better and navigate the organization through volatile times.
 Evidence: While the average company is not yet fully enabled in the use of predictive
analytics (18 percent), half of all respondents expect to have the capability in the future.
Predictive analytics is a functionality many of today’s FP&A teams see as the next big
step forward. Today’s FP&A teams are putting more effort into making their forecast
“future-ready” by using better modeling techniques and tools. Analytics are becoming a
big competitive differentiator. These findings are bolstered by a recent IBM survey of
1,000 CFOs; it found that 9 out of 10 CFOs have already made substantial investments in
analytics; however, adoption of analytics in finance is set to double over the next two
years. IBM cites additional data from a survey by Nucleus Research that found that
investment in analytics pays back $13.01 for every dollar spent, and returns are only
increasing. And companies that invested in analytics were also more likely to be
profitable.
FP&A is gaining better access to data. What’s allowing FP&A to take a more educated look
forward is the growing ability to feed models with better data.
 Evidence: Already, nearly a third (29 percent) of all companies report that they have
access to integrated traditional and unstructured data across enterprise sources, as well as
some external data. They also run historic analysis and predictive algorithms. Looking
forward, respondents believe that data access will only become more important. Over half
of all companies (56 percent) said that to be competitive, they’ll need access to real-time
structured and unstructured data that’s shared extensively across the enterprise.

3. The major trends
Two big trends are reshaping the finance organization: investing more in technology, and gaining
greater access to internal and external data so that it can run through analytics (and predictive
analytics) platforms. Combined, these forces are freeing up FP&A to focus on its strategic,
business partnering role and turning its gaze into the future; finance increasingly offers the
enterprise invaluable insight and foresight so it can better prepare for emerging trends,
competitive threats and changing market conditions. Even organizations that do not yet possess
these capabilities realize they’ve got to change to keep pace. To move up the FP&A maturity
curve, the function needs to embed a data-driven decision-making culture into the organizational
DNA and embrace predictive analytics to be able to look forward and provide management and
business partners with information about what’s coming next.