Having long been hidden away in the back office, CFOs have taken 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 in the face of global crises like COVID-19 or ongoing market changes. Last year taught us the value of disaster preparedness – not only the need for business continuity plans, but also to react with agility to rapidly changing conditions and to adjust financial forecasts on the fly.
by Prophix Global Survey of Agility in Planning, Budgeting and Forecasting 2021 conducted in partnership with FSN Research revealed significant gaps in finance’s ability to respond to almost all categories of surveys – ranging from speed and insight to forecasting accuracy and the ability to plan scenarios – which hinders the ability of organizations to anticipate and react to changes in activity.
These gaps in financial planning and budgeting underscore the need for organizations to accelerate or launch their digital transformation initiatives to better navigate today’s normal new business environment: change.
The truths revealed by the pandemic
According to survey responses from over 500 CFOs, 80% of CFOs said they were unable to forecast beyond a year, while only 43% were able to forecast their income with a accuracy of +/- 5%. While scenario planning supports the ability to pivot in times of extreme flow, 41% of finance managers said they haven’t taken advantage of these capabilities.
As financial services scrambled to respond to the unprecedented impacts of the pandemic on businesses, they quickly realized they needed access to real-time data to make their decision-making more precise and agile. But by leveraging cloud-based business performance management (CPM) software, finance managers can forecast faster, more accurately, and further into the future – helping to fundamentally change the role of finance from reactive to proactive, enabling them to better forecast change and take on a greater role as business advisors.
Artificial intelligence (AI): it’s here and it’s useful
Artificial intelligence (AI) has been called a “gadget” by some finance professionals, but legitimate AI technology is the blueprint for how to run business and finances in the future.
Technologies such as Prophix’s AI Virtual Financial Analyst solution improve the speed and reliability of CPM software and change the way professionals interact with businesses through natural language processing. Two-way natural language technology makes speaking and being spoken faster and more efficient than spending hours manually entering data into reports or calculating numbers, which helps finance teams make smarter decisions and more efficient on the basis of data-driven business intelligence.
As companies increasingly embrace machine learning, AI, and other advanced technologies in their day-to-day operations, it’s important to ensure that these technologies deliver real business value to an organization.
For financial institutions, an increased reliance on data analysis software such as CPM systems that provide granular levels of detail and nuance for smarter, faster decisions, and business-driven IT systems. cloud that empower teams in this remote working world is an essential first step to increased productivity and survival as we enter a post-pandemic economy.
At the end of the line : Modern finance is all about adding value, leveraging new technologies, and bringing together new skills and technological capabilities. With advanced CPM technology powered by AI and machine learning like Prophix software, organizations have the tools they need to react more quickly to change while ensuring the sustainability of their business through more strategic and relevant decision-making.