A good FP&A solution embraces the power of AI and should already have incorporated it into its technology.
Over the past few years, the concept of Artificial Intelligence or ‘AI’, has finally been accepted into the mainstream and is dominating conversations around the world. With the rapid emergence of cognitive computing and machine learning, AI had been sitting in the wings for decades waiting for the right time to shine, and that time is now.
According to Gartner, Inc., “Analysts predict that by 2020, AI technologies will be virtually pervasive in almost every new software product and service.” It goes on to suggest that “AI will be a top five investment priority for more than 30 percent of CIOs.” What this tells me is that within 5-10 years, nearly 100% of corporate systems, operations, and processes will be embedded with some form AI or Machine Learning, which makes sense considering organizations are continuously looking for ways to cut costs, improve the customer experience, reduce error-prone human intervention, and reallocate a workforce to more value-added capabilities and opportunities.
But what does AI have to do with Planning?
It depends on the organization, but if it truly costs 3-5% of revenues to generate an annual plan, for instance, then AI should have a huge impact since the majority of tasks could, and should, be automated related to data access, data prep, and workflow specifically. Many large, global organizations start the planning process in the summer in order to achieve the goal of completing the process by December. Efficient? Not in the least. In this example, what would the impact be if they were able to reduce the process by one month’s time? Two months? Removing even 1% from the annual planning process could potentially result in $MMs of savings for even a mid-tier company. But the focus shouldn’t merely be on efficiency, because if it doesn’t drive better participation, fuel behavior change, and align accountability, it will not be effective.
What makes a good FP&A solution?
A good FP&A solution embraces the power of AI and should already have incorporated it into its technology, enabling customers to incorporate predictive and prescriptive intelligence into their models. The ability to quickly analyze trends, visualize analytics, and apply AI to budgets and forecasts shortens the cycle and eliminates the guessing games and negotiation that typically takes place, and reduces overall time and effort.