In tough times, FP&A is transitioning to a forward-looking stance to support smart business choices.
Inflation, anemic growth, market volatility and belt-tightening are top of mind for FP&A leaders. In a recent survey of NeuGroup for Heads of FP&A, members revealed they are putting great emphasis on collaborating with the business.
- Specifically, they are using modeling and scenario planning to help operational leadership make informed decisions on how to plan for a difficult environment by reducing costs and/or grabbing potential growth opportunities. As the chart below shows, 94% of respondents have either adopted these practices or plan to in the next 12-18 months.
Time to look forward. The combination of these data points tells an important story about the critical role FP&A plays in helping companies withstand economic instability while improving results through better decision support.
- Scenario planning and modeling enables meaningful conversations with business partners seeking to eke out savings and make savvy investments in continued growth.
- To this end, 75% of those surveyed plan to adopt advanced analytics solutions, and half are looking to implement machine learning tools.
With the help of these new technologies, FP&A teams will be able to offer better advice to their business partners. That trend is reflected in members’ plans to embrace a more forward-looking approach to planning and forecasting.
- Sixty-seven percent of respondents expect to adopt predictive analytics this year; the same number also intends to transition to rolling forecasting.
The bottom line: The business challenges ahead are elevating the role of FP&A as a strategic advisor to the business. So this is an opportunity for FP&A teams to build credibility by producing actionable, forward-looking insight and leveraging new technologies to improve modeling and analytics.