Skip to main content
Home
The Online Resource for Modern FP&A Professionals
Please register to receive the latest FP&A news, updates and tips Login

Main menu

  • Home
  • FP&A Insights
    • Contributors
    • FP&A Trends Digest
    • FP&A Talks Series
    • FP&A Trends Research
  • FP&A Board
    • Amsterdam
    • Boston
    • Brisbane
    • Brussels
    • Chicago
    • Copenhagen
    • Dubai
    • Frankfurt
    • Geneva
    • Hong Kong
    • Houston
    • Kuala Lumpur
    • London Board
    • London Circle
    • Melbourne
    • New York
    • Paris
    • Perth
    • San Francisco
    • Seattle
    • Shanghai
    • Singapore
    • Stockholm
    • Sydney
    • Tokyo
    • Toronto
    • Washington D.C.
    • Zurich
  • AI/ML Committee
    • Introduction
    • Meetings
    • Members
    • Resources
  • Video Content
    • Digital FP&A Boards
    • FP&A Webinars
    • Short Videos
  • Contact Us
  • About Us
    • Ambassadors
    • Privacy Policy
    • Company Policy
    • Editorial Guidelines
    • Our Sponsors & Partners
The four plays Supply Chain leaders need to know

The four plays Supply Chain leaders need to know

Click here to view details and register

 

Emerging Technologies For Intelligent FP&A Solutions
New
October 1, 2021

By Michael Coveney, Head of Research at FP&A Trends Group

FP&A Tags
Financial Planning and Analysis
FP&A Technology
FP&A Predictive Analytics
AI/ML FP&A

fp&aThis series of eight blogs is intended for those considering a transition to “intelligent financial planning and analysis” – essentially, modernising solutions and systems to support a dynamic approach to analytics. Here, we’ll examine the technologies on the horizon that will support an intelligent FP&A solution.

There are many terms connected with FP&A, such as “unstructured analysis,” “predictive analytics,” and “machine learning". Often very little detail on how they can be used in everyday life. Sure, there is an odd example, such as how the sales of one product in a supermarket are related to another based on their location. But what do these technologies actually do, and how can they help management in today’s fast-moving, complex business environment?

Perhaps the best place to start is by considering the progression in analytics beyond reporting and seeing the reasons why this has occurred. The following capabilities can be labelled as artificial intelligence (AI), as they try to mimic the behaviour of a person in using the data to predict or make changes in the future based on historical data.

Trending

This first capability has been around for many years, but typically within a dedicated statistical package. More recently, trending analysis has become part of the toolset available within most analysis systems under the name “predictive analytics.” It uses statistical techniques to detect patterns in the data of single variable overtime to produce a time-based formula that fits the series. This is then used to derive future series along with a degree of confidence about the accuracy of predicted numbers.

Correlation

This following capability recognises that practically all variables are influenced by other measures, whether they be actions or assumptions about the business environment. These linkages can be deduced mathematically using a technique called regression analysis. There are two types of variables: a dependent variable, which is the main factor that we are trying to predict, and independent variables, which are the factors we suspect have an impact on the dependent variable. This analysis produces a formula that can be used to predict future results of the dependent variable by entering values (or using the trends created above) for the independent variables.

Dynamic correlation

In this next stage of progression, the analytic system constantly refines its mathematical model of past results and doesn’t require the user to make changes to the rules governing predictions. This is the basis of machine learning, where the constant supply of data and results allows the model to learn from historical relationships and trends in the data.

Automated management processes

This final stage links results (or, more accurately, exceptions) to the management process itself. If any exception is spotted, the system can automatically trigger a response such as requiring more detail on the exception or causing a partial re-plan of the affected areas. This, in turn, moves organisations away from annual planning and budgeting to a process that is triggered by predicted exceptions.

Data models

In the past, all of the above capabilities required data to be stored in some form of model that had a defined structure. This would be as a series of relational database tables, a multidimensional database, or a combination of both.

Today, there is another option where data is not kept in a predefined model or organised in a structured manner, such as tables that have defined fields and records. A good example is Internet search engines that are able to produce analyses from the web that have no regular structure.

It’s still early days with this technology as far as FP&A is concerned. But it promises to speed up analyses as the data sources themselves, both internal and external to the organisation, become part of the model.

Limitations

The limiting factor of all these technologies is the data itself. They all rely on data being accurate and complete. They also rely on the fact that the world is rational and that people make decisions based on sound logic. But despite this, these tools are a powerful ally for management as they seek to understand the past and how it may affect the future.

 

The article was first published in the D!gitalist Magazine

The full text is available for registered users. Please register to view the rest of the article.
  • Log In
  • or
  • Register

Related articles

fp&a
Understanding “Intelligent FP&A”: A Dynamic New Approach For Finance
August 31, 2021

The volume of data is so large and complex that forecasts are often unpredictable: the world...

Read more
Modern Technology
Modern Technology: Transforming FP&A’s Agility and Adaptability
May 11, 2021

The FP&A transformation journey should start right now. In this video, you will learn about three...

Read more
Artificial Intelligence
Making Artificial Intelligence Real for FP&A Professionals
May 5, 2021

In today’s world, companies need more than ever fast insights to make the appropriate critical moves...

Read more
planning
Navigating Uncertainty with Scenario Planning and Predictive Planning
September 22, 2021

The COVID-19 pandemic has forced many companies to revise their strategies and budgets in preparation for...

Read more
Predictive analytics technology
Utilising Modern Technology for Predictive Planning
July 27, 2021

Analysis is only as good as the decisions that result from it. In the uncertain business...

Read more
team
How Technology Has Been Shaping a Winning FP&A Team
July 22, 2021

The key to modern FP&A teams is through empowered organisational governance, underlying a rich collaborative exchange...

Read more
+

Subscribe to
FP&A Trends Digest

We will regularly update you on the latest trends and developments in FP&A. Take the opportunity to have articles written by finance thought leaders delivered directly to your inbox; watch compelling webinars; connect with like-minded professionals; and become a part of our global community.

Create new account

The Latest Trends and Developments in Financial Planning & Analysis: 2022 Global Survey Results

The Latest Trends and Developments in Financial Planning & Analysis: 2022 Global Survey Results

Click here to view details and register

Pagination

  • ‹‹ Previous
  • July 2022
  • Next ››
Su Mo Tu We Th Fr Sa
26
27
28
29
30
1
2
 
 
 
 
 
3
4
5
6
7
8
9
10
11
12
13
14
15
16
The Latest Trends and Developments in Financial Planning & Analysis: 2022 Global Survey Results
 
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
1
2
3
4
5
6
 
 
 
 
 
 
All events for the year

Future Meetings

The Latest Trends and Developments in Financial Planning & Analysis: 2021 Global Survey Results
The FP&A Trends Webinar The Latest Trends and Developments in Financial Planning & Analysis: 2022 Global Survey Results
July 12, 2022
The FP&A Trends Webinar
The FP&A Trends Webinar FP&A Board Maturity Model: Achieving Intelligent Transformation
September 15, 2022
scenario management
The FP&A Trends Webinar Navigating Uncertainty with FP&A Scenario Management
September 21, 2022
Agile FP&AAI/ML FP&ABeyond BudgetingBusiness Intelligence (BI)Capital PlanningCash PlanningCollaborative FP&ACorporate Performance Management (CPM)Cost PlanningData-Driven FP&AData VisualisationDigital FP&ADriver Based PlanningExtended Planning & Analysis (xP&A)Financial Planning and AnalysisForecasting QualityFP&A AnalyticsFP&A Business EnvironmentFP&A Business PartneringFP&A Case StudiesFP&A DashboardsFP&A KPIFP&A Maturity ModelsFP&A PeopleFP&A Predictive AnalyticsFP&A RPAFP&A Scenario PlanningFP&A SkillsFP&A StorytellingFP&A Strategic PlanningFP&A Team BuildingFP&A TechnologyFP&A TransformationFP&A Trends ResearchIntegrated FP&AModelling and ForecastingPlanning and BudgetingProfitability AnalysisRisk-Adjusted PlanningRolling ForecastWhat is FP&AZero-Based Budgeting (ZBB)

Please register to receive the latest FP&A news, updates and tips.

info@fpa-trends.com​

              

Foot menu

  • FP&A Insights
  • FP&A Board
  • FP&A Videos

Footer countries

  • Amsterdam
  • Boston
  • Brisbane
  • Brussels
  • Chicago
  • Copenhagen
  • Dubai
  • Frankfurt
  • Geneva
  • Hong Kong
  • Houston
  • Kuala Lumpur
  • London Board
  • London(Circle)
  • Melbourne
  • New-York
  • Paris
  • Perth
  • San Francisco
  • Seattle
  • Shanghai
  • Singapore
  • Stockholm
  • Sydney
  • Tokyo
  • Toronto
  • Washington D.C.
  • Zurich

Copyright © 2022 fpa-trends.com. All rights reserved.

0