FP&A Revealed as a Main Focus For Firms

A new survey has revealed that financial planning and analysis (FP&A) is currently a top priority for businesses, as the responsibilities of the chief finance officer (CFO) increasingly expand and provide new opportunities for finance teams to reinforce their FP&A capabilities.

The 2024 Global Finance Trends Survey Report conducted by global consulting firm, Protiviti, also found that there is a considerable rise in the number of business groups, besides the finance teams, that are actively involved in FP&A. This trend among firms coincides with a growing sophistication of FP&A capabilities as a result of developing technologies, particularly AI. Protiviti surveyed 950 finance leaders across the world.

Meanwhile, a recent report from software company Datarails, has highlighted a drive by CFOs to keep their organisations competitive through the purchase of FP&A software.

Pleasing shareholders

According to the survey, 69% of CFOs in publicly held firms deem FP&A as a high priority - more than finance leaders working for private firms and the public sector, reflecting a push from shareholders for more sophisticated and expansive use of FP&A, which is the direction firms appear to be headed.

As FP&A permeates an increasing number of business areas, CFOs are bearing in mind that improved business analyses of data collected by other teams, can translate into more precise financial forecasts and analyses.

Leading with AI

CFOs and financial leaders are keen to leverage new technologies, particularly AI, to support planning and forecasting tasks.

According to Protiviti’s data, 57% of firms that are employing GenAI are using it to enhance their financial forecasting activities. 

Finance firms have particularly been keen adopters, with 34% of those surveyed currently using GenAI, and 58% of this group reporting that the move has enabled them to achieve meaningful and measurable progress in trying to optimise costs.

Keeping competitive

A report from software company Datarails, compiled from the responses of 270 US CFOs, reveals the importance finance leaders place on acquiring new software to support their FP&A activities.

The 2024 CFO Sentiments: How AI Is Changing Finance Departments report reveals that 34% of the finance leaders surveyed are investing in finance software as a priority, driven by their ambitions to keep up with digital transformation. 

A smaller 28% of finance leaders want to improve their software to enhance collaboration, while the rest of respondents include 16% who aim to prioritise the consolidation and automation processes, and 22% who want to gain specific business value.

The report also reveals that finance leaders are leveraging advanced technology to improve decision-making, leading to renewed interest in FP&A software. A considerable 56% perceived this software as crucial in formulating precise financial forecasts with actionable insights.

"While in 2023 just 19% of finance leaders cited … FP&A solutions as a 'must have', this year 61% have made the plunge and purchased FP&A software," the report said. 

When choosing software, almost 75% of the CFOs surveyed prioritised tax software. Accounting software was the next most popular, followed by enterprise resource planning systems.

A considerable 90% of CFOs stated that AI knowledge will be vital to increasing their market value, and 97% said they have ambitions of becoming a CEO, with 39% believing, and 23% strongly believing, that AI skills are crucial to improving their market value.

The report also shows that emerging technologies are playing an ever growing part in career development and company progression for leaders, with 85% actively developing their knowledge with AI.