To bring some perspective to this position of AI within the context of FP&A activities, the FP&A Trends Group recently conducted research examining how artificial intelligence (AI) and machine learning (ML) were being used within the profession. They carried out interviews with thought leaders and academic professionals and examined case studies of organizations that were using AI and ML successfully.

This paper is a result of that research, looking specifically at how, when combined with human intelligence, AI can transform the role of FP&A.

The New Normal means that planning is no longer an extrapolation of the past. Similarly, business drivers that worked last year may no longer be relevant for the future. The reality is that organizations face multiple possible futures. Each one can be triggered by a crisis or an unforeseen event that will require the company to adjust or even change course.

So how should FP&A adapt to this New Normal?

Today’s uncertain times mean that it is no longer good enough for organizations to have one fixed plan and forecast. Historic data by itself cannot help predict the future, nor can classical planning methods and standard variance analysis provide sufficient information to manage a business. It is time to change and adopt a fact-based mindset towards business decisions.

Traditional legacy and static methods are no longer sufficient for budgeting, planning, and forecasting. To help navigate this challenge, we must turn to Scenario Planning and Rolling Forecasts to guide us. 

The economic volatility of 2020 has revealed the shortcomings of the traditional FP&A process and the pressing need for transformation. For budgeting, planning, and forecasting in particular, conventional methods are no longer sufficient This is where Scenario Planning and Rolling Forecasts can help guide us.