After long being hidden away in the back office, finance leaders have evolved into their rightful place as strategic business leaders with a seat at the table.
Organizations are increasingly relying on their finance teams to guide them through constant change, whether that's in the face of global crises like COVID-19 or ongoing market shifts. The past year taught us the value of disaster preparedness – not only the necessity of business continuity plans, but nimbly responding to fast-changing conditions and adjusting financial forecasts on-the-fly.
Prophix's 2021 Agility in Planning, Budgeting and Forecasting Global Survey conducted in partnership with FSN Research revealed sizable shortcomings in finance's ability to respond to nearly every survey category – ranging from speed and insight to forecasting accuracy and the ability to conduct scenario planning – all of which hinders organizations' ability to anticipate and react to business shifts.
These financial planning and budgeting gaps underscore the need for organizations to accelerate or start their digital transformation initiatives to better navigate today's new normal business environment: change.
Truths Revealed by the Pandemic
According to survey responses from more than 500 financial leaders, 80% of CFOs reported they were unable to forecast beyond a year, while only 43% were able to forecast their revenue with +/- 5% accuracy. While scenario planning supports the ability to pivot in times of extreme flux, 41% of finance leaders said they did not leverage these capabilities.
As finance departments scrambled to respond to the pandemic's unprecedented impacts on businesses, they quickly learned they needed access to real-time data to make their decision-making more accurate and agile. But by leveraging cloud-based corporate performance management (CPM) software, finance executives can forecast more quickly, more accurately and farther into the future – helping to fundamentally change the role of finance from reactive to proactive, allow them to better predict change, and assume a stronger role as business advisors.
Artificial Intelligence (AI): It's here and it's helpful
Artificial intelligence (AI) has been written off by some finance pros as 'gimmicky,' but legitimate AI technology is the model for tomorrow's way of managing business and finance.
Technology like Prophix's AI Virtual Financial Analyst solution improves the speed and reliability of CPM software and changes the way professionals interact with businesses via Natural Language Processing. Two-way natural language technology allows for a faster and more efficient way to speak and be spoken to than spending hours manually inputting data into reports or crunching numbers, which helps finance teams make smarter and more efficient decisions based on strategic data-driven insights.
As businesses increasingly embrace machine learning, AI and other advanced technologies in their day-to-day operations, it is important to ensure these technologies are driving real business value to an organization.
For finance-forward institutions, increased reliance on data analytics software such as CPM systems that provide granular levels of detail and nuance for smarter and faster decisions, and cloud-based computing systems that empower teams in this world of remote work is an essential first step to enhanced productivity and survival as we enter a post-pandemic economy.
Bottom line: Modern finance is about adding value, leveraging new technologies, and the convergence of new skill sets and technological capabilities. Through advanced CPM technology powered by AI and machine learning like Prophix Software, organizations have the tools they need to more quickly react to change while future-proofing their business with more strategic and insightful decision making.
