Even before the pandemic, many FP&A teams were struggling to provide what their organizations needed: agile forecasting and analysis to enable smarter decision-making in the finance function and throughout the business. Covid-19 exposed those weaknesses, and now they must be fixed.

To do this, finance leaders will need to commit to renewal. New technologies, particularly in the data and analytics field, will help their FP&A functions to evolve. But they also need to invest in the skills base, whether internally or via arrangements such as shared services.

The opportunity

For the finance function, the opportunity is to enhance its position as a growth enabler and strategic partner to the rest of the organization. And improving risk-assessment capabilities will ensure that the function is better placed to protect the business.

The risks

The trendsetters are not standing still. They have ambitious plans for future investment in transformational FP&A capabilities, which will further extend their competitive advantage.

They are setting the standard. Other organizations must now rise to meet it, or lose out. To do this, they must focus on:

1. Integration

Ensure all initiatives are connected to enterprise strategies with clear expectations of the financial impact and tightly linked sales, marketing, operations, financial plans and forecasts.

2. Automation

Utilize the latest technologies to build forecasts with robust statistical models that harness machine learning and artificial intelligence capabilities.

3. Adaptability

Develop the agility to sense and manage changing market dynamics, ensuring the enterprise can swiftly recalibrate resources as needed.

4. Proactivity

Consider multiple scenarios and clearly articulate the financial implications of business decisions, with agreed-upon countermeasures for each response.