The FP&A Trends Webinar: The Winning Formula for FP&A Storytelling
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The FP&A Trends Webinar: The Winning Formula for FP&A Storytelling
Click here to view details and register
By Cédric Schmitz, Financial Consultant at Upside Advisory
In today’s world, companies need more than ever fast insights to make the appropriate critical moves. Unfortunately, current BI tools through dashboards report ‘what’ happened and does not help to understand the ‘why’.
In this article, we cover how organisations may achieve ‘true’ insight (learning the ‘why’) fast by looking to future-facing technology: augmented analytics.
Augmented analytics describes the use of enabling technologies such as Machine Learning (ML) and Natural Language Processing (NLP) to assist with data preparation, insight generation and insight explanation to augment how people explore and analyse data in analytics and BI solutions.
Through the integration with BI, Augmented Analytics takes traditional BI dashboards to the next level, improving the speed and quality of decision making.
In recent years there has been a constant increase in the pressure regarding both efficiency and value creation the FP&A must meet:
Pressure on efficiency
At the same time, 81% of CFO’s expect staff to remain the same or decrease in 2021, according to the latest APQC study.
Pressure on value creation
This pressure has been reinforced during the pandemic, with executives being even more demanding, as companies are experiencing more volatility, complexity and uncertainty than ever before.
Financial analysis is still mostly done outside BI solutions
In today’s reality, in most cases, controllers download data from BI dashboards into Excel to determine root causes and uncover meaningful, actionable insights in their effort to piece the story together.
Financial analysis is performed completely manually
Current BI solutions still lack the capability to automate partially the process of producing ‘true’ insight. For instance, at the question “Why the sales increase in Q3 compared to Q2?” the next generation BI solution should be able to answer “sales increase in Q3 compared to Q2 by 15% due to:
Augmented Analytics leverages the power of Machine Learning (ML) and Natural Language Processing (NLP) to put data science capabilities into the hands of FP&A people.
Integrating Augmented Analytics into BI solutions would provide critical benefits to FP&A, such as:
Organisation can make augmented analytics available to the FP&A department in two steps (extremely summarised here):
Step 1. The organisation builds multiple ML models on its ML platform to diagnose conditions (Sales revenue, demand, profit margin, churn…) it wants insights from. The steps required to develop, deploy and maintain ML models are well documented and explained in multiple articles and webinars of FP&A Trends.
Step 2. The organisation integrates those models, manually or automatically, into their existing BI solutions dashboard. In short, traditional key performance indicators (KPIs) presented in dashboards are completed with augmented analytics capabilities, from ML models build on the platform outside BI solution.
Although this approach can be implemented today, it does not offer the ease of use and speed of a one-stop-shop solution seamlessly integrating BI and Augmented analytics altogether. BI solutions are not there yet, but it may happen sooner than you think.
“Hope and pray” was never a strategy, and now “wait and see” is no longer an option in today’s environment either. It’s time for the FP&A function to reshape the way it operates.
AI combined with BI can help with it, by solving the impossible equation it faces today: Provide better insight in less time to decision-maker, with the same number of staff.
Today's FP&A challenges will not be solved by augmented analytics alone, but it can certainly contribute significantly.
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