When it comes to staying ahead of the competition, understanding how new tools and emerging trends can positively impact your capabilities is essential.
As Q1 2023 draws to a close, join us for our roundup of the biggest FP&A trends and find out how you can implement them in your organization.
In this blog post, I’ll share practical insights on the most important financial planning and analysis trends to help CFOs and FP&A teams identify opportunities for growth and gain a competitive edge.
Become more agile with continuous planning
Historically, periodic planning was the FP&A methodology of choice. But when the pandemic hit, economic uncertainty hit new heights. With the situation changing rapidly, it became clear that periodic planning was too slow.
Fast forward to Q1 2023, and we’ve seen market downturns, supply chain disruptions, and labor shortages affecting organizations everywhere. This economic volatility, combined with the need for organizations to stay ahead of the competition, has driven important change in the way FP&A teams operate.
The growing need for more agile financial planning and analysis has put continuous planning firmly in the spotlight. As one of the key FP&A trends for Q1 2023, experts believe that continuous planning is the future of FP&A.
Continuous planning in FP&A is an agile framework that integrates strategic, financial, and operational planning. Importantly, this methodology empowers organizations to be highly flexible and quickly adapt to changing scenarios, enabling them to remain competitive and successful.
Consequently, organizations have made it a top priority in 2023 to understand the extensive benefits of choosing continuous planning over periodic planning.
Want to learn more? Watch our special webinar explaining the key concepts of continuous planning and what it involves.
How to use scenario planning to navigate uncertainty with confidence
The ability to foresee what’s ahead, and alter one’s course appropriately, has always been a critical component of business success. Failing to assess and mitigate risk has serious repercussions for both the business and its people.
Business leaders have become acutely aware of this in the wake of thousands of tech employees laid off over the last year. Yet organizations that carry out better headcount planning can help prevent such layoffs.
The catastrophic consequences following the fall of Silicon Valley Bank further illustrate the crucial value of anticipating a wide range of situations.
This is where scenario planning comes in. Mapping out specific scenarios enables organizations to visualize the potential consequences and test various assumptions. This enables them to prepare for uncertainty.
The downside of scenario planning has always been its time consuming nature and high chance of data transfer errors. Traditionally, finance teams have spent vast quantities of time on scenario planning.
With Pigment’s integrated business planning platform, FP&A teams can quickly analyze detailed scenarios planning natively within the platform.
Workforce planning, sales capacity planning, and strategic operational planning are just three practical examples of how scenario planning can drive optimal results. And instead of taking FP&A teams days to complete, it takes just minutes. This development in financial planning and analysis has transformed the way organizations manage risk.
Pigment’s integrated business planning platform has the potential to skyrocket FP&A teams’ productivity, among other critical benefits of scenario planning in FP&A. This has made scenario planning one of the hottest financial planning and analysis trends of Q1 2023.
Increase productivity with automated FP&A workflows
Emerging AI tools and unprecedented levels of automation are shaking up every corner of the business environment.
ChatGPT, the AI chatbot created by OpenAI, took the world by storm in November 2022. It can produce astonishing results from generating ideas to explaining complex concepts.
Rival tools such as Google Bard AI are similarly impressive. And with careful prompting, AI tools such as these have countless use cases.
Of course, this advancement in AI tools can be applied to finance too. Applications include building finance procedures, summarizing reports, and scenario analysis using AI tools.
Importantly, leading edge FP&A teams are embracing tools to automate workflows. Highly manual processes are being replaced by more efficient data collection and analysis. The impact of these tools enables C-suite executives to be better equipped to make decisions more quickly.
Next level automation is helping employees everywhere work more efficiently. Powerful AI tools are boosting FP&A team productivity by bringing an end to rote tasks.
Embrace improved planning to drive efficiencies
Organizations are becoming increasingly focused on achieving greater levels of efficiency. This applies to everything from people to operations. This has created a vast scope for business leaders to scrutinize.
Inefficient FP&A processes cost businesses approximately $8 billion every year. Unsurprisingly, organizations are making tremendous efforts in this area as they strive to achieve long-term success.
Knowing how to build the most efficient FP&A team has become a key financial planning and analysis trend. Tactics such as optimizing processes, monitoring the right KPIs, and playing to your team’s strengths can drive enhanced performance.
In the broader context, efficiencies have brought attention to the likes of Meta, Twitter, and Amazon who all announced significant layoffs in recent months.
We’ve all seen it; employee numbers rise at an incredible speed in the name of fuelling growth. But before long, those same companies make a U-turn and shed thousands of employees. It’s clear that poor planning can have catastrophic human costs.
To avoid these types of scenarios, HR leaders need to analyze their current and future workforce needs and take into account succession planning and business goals, among other variables.
Having a workforce planning model and successfully implementing it can be challenging. That’s why we created this step-by-step guide to optimizing your workforce for success to help you embrace this important financial planning and analysis trend.
Understand how the role of the CFO is evolving
With a responsibility for everything from financial reporting to controlling budgets, it’s easy for CFOs to get lost in day to day tasks and lose sight of the bigger picture.
The solution is to set the right goals that will drive meaningful performance in 2023. This means seeing the role of a CFO as being a catalyst for digital transformation.
Taking a more proactive stance to their role by embracing predictive analytics, insights, and fostering a culture of strategic business partnerships can help CFOs navigate recession, geopolitical turmoil, inflation and talent shortages.
Stay on track by setting the right goals this year. Take a look at our CFO's Guide To Goal Setting For The New Year to drive your business forward in a meaningful way.
Enhance your business planning capabilities through integration
Business leaders have long recognized the importance of having a complete overview of all functions of the business, including sales, marketing, HR, and finance. This is because it provides valuable insights that drive organizational benefits, including:
- Facilitating improved financial planning
- Identifying operational best practices
- Delivering savings
- Improving the customer experience
Historically, business planning has been a disjointed process where teams worked in silos to create their own strategies. This restricted the growth and therefore the long-term success of the organization.
One of the key FP&A trends of Q1 2023 is the emergence of integrated business planning (IBP), a cutting-edge tool with immense opportunities.
The right IBP platform will seamlessly integrate with your existing data systems, including your HRIS, ATS, CRMs and billing systems. One of the key benefits is that integrated business planning syncs data from all your business applications. This creates a single source of truth across all departments and reduces the risk of data transfer errors.
Importantly, IBP collects and aggregates accurate data in real time, empowering business leaders to make data-driven decisions at crucial moments.
To learn more about how your organization can gain transformational benefits through IBP, head over to our guide to understanding integrated business planning.
Why putting your people first is good for your bottom line
With every increasing competition comes ever more ambitious company missions. But business success relies heavily on its people, and even the most advanced and powerful data systems can’t achieve everything alone.
The companies who succeed are the ones who prioritize their people by addressing the full spectrum of people matters. This includes:
- Attracting talent to address labor shortages in the finance sector
- Engaging staff by nurturing a distinctive culture
- Retaining staff by creating attractive reward and recognition packages
With 40% of CFOs ranking talent shortages as a top business risk, business leaders are prioritizing their energies on boosting the attraction and retention of workers who possess the right skills.
Today’s workforce are more focused than ever on finding an employer that meets their needs. Nurturing the happiness of employees is an important factor for organizations that want to create a workforce that exhibits higher levels of productivity, increased motivation, and greater loyalty towards their employer.
Given that the cost of replacing a worker is estimated to be between 6-9 months’ salary, CFOs have an important role to play in engaging today’s choosy workforce and navigating the complex dynamic between employer and worker.
The rapid pace of technological change presents many opportunities for CFOs and FP&A teams. That’s why staying well-informed about the latest trends in financial planning and analysis is vital to capitalize on those opportunities to drive business performance.
For your chance to gain valuable insights on best practices surrounding the FP&A process, don’t miss FP&A Week. We’ve got a packed agenda featuring some of the top voices in finance at this virtual event, which takes place March 27-30. Register for FP&A Week now to save your spot.
