Top 5 ways CFOs will transform financial planning and forecasting
Recent research undertaken by Gary Simon (CEO of FSN & Leader of the Modern Finance Forum for CFOs on LinkedIn) reveals detailed insights into the thoughts and opinions of finance leaders on the future direction of finance. The presentation titled The Future of Planning & Forecasting includes findings from a global survey involving nearly 1000 participants and reveals feedback on the use of topics such as non-financial data and the use of cutting-edge technology.
Gary presented these findings at a recent breakfast event and we’ve highlighted what we see as five key findings most impacting CFOs. If you want to learn more from any of the points, you can view a video snippet from that breakfast under each section. Happy reading and viewing!
1. Non-financial data will play a powerful role in forecasting
78% of CFOs agree that the key to forecasting more accurately lies in the greater use of non-financial data. Harnessing non-financial data makes organisations more responsive and enables businesses to run more efficiently. Therefore it is extremely important to exploit and explore the potential for non-financial data in your organisation.
2. AI will fuel improved predictability and competitive opportunity for CFOs
FSN reports that just 14% of CFOs are using artificial intelligence (AI) and machine learning despite the fact that data visualization charting is more influential than anything else. Early adopters primarily based in organisations of 10,000+ employees have reported that this cutting-edge technology drives better accuracy and a greater ability to see further into the horizon.
3. Machine learning will improve forecast accuracy
Is cutting-edge technology the future of finance? FSN asked its network of CFOs about AI and machine learning and the research shows that 56% of CFOs agree or strongly agree that we will become more dependent on machine learning to drive more accurate forecasts. 50% of CFOs are in agreement that humans introduce too much bias into forecasting.
4. CRM data will rival general ledger for biggest impact
The research findings indicate the finance community is recognising the need to look beyond financial data to gain that competitive edge with 26% of CFOs ranking CRM data as their most insightful source of data just behind general ledger with 34%.
5. Rolling forecasts will provide greater insights
The global study suggests a nod towards a shift from continuous planning to rolling forecasts. Where continuous planning will likely lead to repeated results, 43% of organisations say their planning, budgeting, and forecasting process is insightful due to the use of rolling forecasts.