Utilizing Technology in FP&A
This article addresses technology in FP&A.
In his book "THE INNOVATORS" Walter Isaacson describes two ways of utilizing technology. One way is artificial intelligence, machines thinking on their own. Another way is augmented intelligence, people using machines to help organize information. Both ways are seen as improvements in our ability to make better decisions. The ability to make better decisions is an important part of FP&A.
I see artificial intelligence in FP&A.
Artificial Intelligence in FP&A
I see artificial intelligence in FP&A through accounting software. Accounting software provides visual aids that provide information about current year revenues and expenses. Accounting software also provides visual aids that provide comparisons between current and prior year revenues as well as expenses. In addition, accounting software provides insight into profitability, liquidity, and solvency through ratios. These examples demonstrate how artificial intelligence, machines thinking on their own, provides insight into what businesses are doing and where they are going.
Artificial intelligence through accounting software is a way for FP&A practitioners to help people make better decisions. Making better decisions is stimulated by thinking about and learning how activities fulfill the value propositions within businesses. I see the benefits from artificial intelligence however the ability to organize information is very important.
I see augmented intelligence in FP&A through accounting software. Accounting software provides the ability to organize transactions around points of view. One point of view is segments like products, services, and geography. Another point of view is functions like production, selling, and administration. Another point of view is initiatives like research, development, and training. Organizing transactions around selected points of view enhance the ability of FP&A practitioners to study businesses, ask questions, and create information. The enhancement of this ability gives FP&A practitioners the opportunity to use machines in order to organize information, augmented intelligence, for the purpose of helping people make better decisions.
Augmented intelligence through accounting software is a way for FP&A practitioners to help people make better decisions. FP&A practitioners help people make better decisions by engaging people to think about what they want to do and how they want to do it. The acts of thinking and doing can be better understood through the utilization of technology.
I see utilizing technology in FP&A through not only artificial intelligence but also augmented intelligence.
Utilizing technology is an important part of the FP&A practitioner’s role to provide value. The question that FP&A faces is whether artificial intelligence will replace the practitioner. From a selfish perspective, I do not want to be replaced because I see myself as an important part of FP&A. From a selfless perspective, I want people to better themselves because doing so is a benefit for society. As practitioners, we must develop FP&A as an element that emphasizes betterment. Betterment can be achieved through utilizing technology. The decision of utilizing technology through artificial or augmented intelligence ultimately is made by the people who need FP&A.
Remember…FP&A is about progress.