For many, the first quarter of 2022 has not been the energised start to the year we were hoping for. What has become apparent as we enter the third year of living with Covid-19, is that what we originally thought was going to be a temporary situation is now a permanent fixture.
So how does this global environment translate and impact the role of the FP&A Professional in the second-half of 2022?
Here at Minerva, we have curated our top 5 predictions for the rest of this year. These items are meant to assist the FP&A Professional to continue to lead their companies through changing tides.
1. Data Storytelling
The second half of this year is going to give FP&A Professionals the chance to flex their abilities in the storytelling department. In a period where people are time poor and experiencing burnout, storytelling is an emerging skillset to create ‘inspired’ communication within your organisation.
For finance, data storytelling provides the structure to highlight important business insights and convey numerical analysis in an engaging way. Organisational psychologists have long been touting the benefits of storytelling as a learning tool that makes hard to digest information easier to recall.
2. The hybrid work environment is a permanent fixture
2020 saw organisations move quickly to accommodate employees to ‘work from home’. However, it is now evident that the hybrid work environment is here to stay. Just this January, many Sydney offices delayed the return to the office until February 2022 due to the Omicron spike. This demonstrates it is necessary to have a mobilised workforce that can operate at 100% from both their home and physical work environment.
Therefore it’s necessary that workplaces continue to invest in tools and solutions that will last the ‘long yard’. FP&A is a critical business unit for any organisation, and their ability to perform needs to be supported with the right technology. One technology that is crucial is a high-performing cloud-data warehouse (CDW) solution. A CDW enables multiple groups to simultaneously access data, from any location, faster. By providing ‘fit-for-purpose’ technology that streamlines user experience, you will be confident in employees productivity, regardless of their work environment.
3. Continuous market volatility
Market volatility is likely going to continue to impact businesses and the economy for at least the next 6-months.
A CFOs planning process needs to be capable of handling economic and geopolitical disruption. In particular, agility in financial planning is important in order to anticipate events, as well as the ability to respond quickly and decisively to market shifts.
Similarly, this impact is also going to extend out to consumers. As market volatility continues, you are likely going to see changing needs of customers. How you plan for and respond to these changes in consumer behaviour will set you apart from your competitors.
4. Budgeting and forecasting challenges
Linked closely to planning, is budgeting and forecasting. For 2022, we believe there are two key words every finance professional needs to get comfortable with: Flexibility and Timeliness.
Disruptions to forecasts and budgets are going to continue over the next 12-months. However, the difference is that the executive team now expect finance to have a better handle on the situation (given they’ve had the last 24-months to get prepared). Undoubtedly, this puts greater pressure on FP&A professionals to deliver.
Rapid and unpredictable changes in operating conditions means that flexibility needs to be sustainable. FP&A need to foster innovation, be willing to change and adapt their processes, and ensure that they are working in alignment to changing priorities.
Secondly, timeliness is the other big factor for FP&A professionals to consider. It is no longer acceptable for budgets, forecasts, and recalculations to take weeks – or even days. Instead, it is critical that finance can build models, adjust, and see new projections on demand. To achieve this level of timeliness it is necessary that finance have access to advanced tools that accelerate the forecasting and budgeting process through one unified solution.
5. Predictive Analytics and AI is going to increase
According to a report from PWC, 86% of those surveyed claimed AI is now viewed as a “mainstream” technology.
To successfully implement AI and Machine Learning technology, you need to have access to clean, usable data. With organisations collecting more data that ever, manual preparation and analysis of this data is becoming too intensive and is error prone. AI and machine learning not only assists with data preparation, but it allows the finance professional to quickly adjust and automate forecasts using predictive analytics. This level of technology is going to further divide the competition, with those who use AI coming out as more agile and resilient organisations.
2022 is going to require agility and flexibility from finance teams. There will be opportunities to impart their leadership with the rest of the organisation. However, this is likely going to require a change to processes.
We are a management consultancy laser focused on business transformation. We help CFOs & FP&A teams with budgeting, forecasting, and planning and Data & Analytics professionals deploy high performing digital ecosystems. Our goal is to give you more time and resources to focus on profitable business growth and data driven insights.