5 May 2023
We all know what FP&A stands for – Financial Planning & Analysis – but do we really know what FP&A does? To give a simple analogy, FP&A is like a crystal ball for the financial future of a company, except that there’s no magic involved – it is smart people using technology to make accurate forecasts, spot trends and help steer the organization towards financial success.
With fancy algorithms and lightning-fast software, FP&A teams are now able to process huge amounts of data in the blink of an eye. They can simulate different scenarios, test out strategies and create aesthetically pleasing reports. Teams can collaborate online seamlessly, monitor real-time financial performance and even run complex scenario planning exercises in a matter of minutes. FP&A has gone from being finance’s dull, tedious uncle to its dynamic and exciting cousin brimming with innovation and creativity.
When it comes to the transformation of FP&A through technology, there is one name that keeps cropping up – Jedox. Akin to a Swiss Army knife for FP&A, Jedox is a software solution with all the tools you need to keep your financials on track. With its advanced analytics tools and user-friendly interface, Jedox has been transforming the way we do finance, and making FP&A fun for finance professionals.
To delve into the world of FP&A, DigitalCFO Asia sat down with Mr Andrew Soon, Vice-President of Sales, Asia, Jedox for a quick chat.
How Has Technology Transformed the Traditional Methods of Planning & Forecasting?
Technology has made data collection from multiple sources a breeze. These data can provide real-time insights into consumer behaviour and market trends, which can be used to improve forecasting accuracy. With AI and machine learning, analysis of large amounts of data can now be automated, patterns identified and predictions made more quickly.
Here’s the most impressive part – technology integrates and consolidates all data available into one common database. FP&A practitioners can create best-case and worse-case scenarios at the push of a button. Any data can be used as a driver – weather, seasons or logistics cost. This means planners can spend less time stressing about the “what ifs” and more time developing valuable strategies to adapt to any scenario that comes their way.
What Are The Key Benefits of Using Technology for Planning & Forecasting Processes?
Thanks to technology, businesses can now make informed decisions in real time using data and insights from machine learning and predictive analytics. With advanced analytical tools and algorithms, forecasting software improves the accuracy of predictions, reducing the risk of errors and unexpected outcomes. Responding faster to market changes gives businesses a competitive edge. Technology also allows for more flexibility in planning and forecasting as scenarios can be quickly adjusted based on new data. Plus, technology can help cut costs associated with manual data entry and analysis.
Can Technology Help Businesses Overcome Challenges in Forecasting Accuracy?
Forecasting financial performance is like predicting the weather – it can be tricky, especially in today’s fast-changing business world. Sudden shifts in the economy or unexpected events can stump even the most experienced planners . But with the right tools and skills, businesses can navigate these challenges and make informed decisions. Accurate forecasting requires a deep understanding of the business and industry, as well as the ability to analyze and interpret data, just like a professional meteorologist.
This is where Jedox comes in. We help organizations improve their planning and forecasting capabilities, for example finance leaders can easily incorporate external drivers into their forecasting models, allowing them to develop more accurate and comprehensive forecasts. Jedox also offers powerful visualization tools, such as time-series plots, scatterplots, heat maps, bubble charts, and geographic maps, which can help businesses identify patterns and trends in their data and improve forecasting accuracy. With these capabilities, organizations can drive better business value and achieve their financial goals.
What Are The Risks and Challenges Associated With Implementing Technology-based Planning & Forecasting Systems?
There are always challenges when it comes to implementing a new software. One main challenge is the need for technical expertise, which may not always be available in-house. This can lead to delays and increased costs associated with outsourcing or hiring specialized staff. Additionally, there is always a significant cost outlay when it comes to purchasing and implementing the new technology. Employee mindset is a key challenge too, as some employees may be resistant to change, leading to slow adoption rates and reduced effectiveness.
“Efficient implementation is a key differentiator for enterprises looking to achieve quick time to value. To that end, finance leaders can prioritize solutions that facilitate faster data integrations through prebuilt connectors and offer an intuitive user experience to drive adoption.”
Andrew Soon, VP of Sales, Asia, Jedox.
How Can CFOs Ensure They Have The Right Data and Analytics Capabilities to Fully Leverage Technology for Planning & Forecasting?
CFOs are in the driver’s seat to set the direction on which forecasting methodologies to adopt and the strategy to get there. . For example, in a fast-paced consumer business, CFOs will want to adopt short planning cycle, and put in place right metrics that drives demand. In this case, perhaps they want to adopt a continuous forecasting methodology instead of the common quarterly or monthly forecast adopted within the finance team.
These are some suggestions on how to build the right data and analytics capabilities:
Agile team: Build an agile team by selecting the best-fit team members to take on this project. Having someone with the understanding of both functional requirements as well as appreciation of tools to build the digital transformation plan. In addition, ensure you have business SMEs and finance experts to help you define the goals, requirements, and existing gaps.
Process: It begins from the top. You can have the right people and technologies, but having the right mindset is extremely crucial to success. Build a digital culture where you take on measures to cease all traditional processes that do not support your strategy. With increased adoption, capabilities will evolve within your organization.
Technology is revolutionizing the way we approach financial planning and analysis (FP&A). With advancements in data collection, advanced analytics, and scenario planning, businesses can make better-informed decisions and respond more quickly to changes in the market. Technology allows for more accurate predictions, increased flexibility, and cost savings. However, implementing new technology can also pose challenges, such as technical expertise, costs, and resistance to change. Nevertheless, with the right tools, finance leaders can easily navigate these challenges and unlock the full potential of technology to drive business value for their enterprise.
If you would like to know more about how you can utilize technology to reinvent your planning & forecasting functions, catch Andrew at the 2nd DigitalCFO Asia Singapore Symposium 2023 on 11th May at the Sofitel Singapore City Centre. The Symposium will see over 120 forward-thinking finance leaders come together to discuss and exchange insights on how CFOs can be the key changemakers of the organization in leading digital transformation.
Reserve your seat at https://digitalcfoasia-symposiumseries.com/singapore/#registration
To find out more about Jedox or to request a demo: click here.
Connect with Andrew on Linkedin here.
