What a world we live in today! We can ask any question and get an answer almost instantly.
The quality of that answer will vary as a function of the data the system is able to access, and the tool or logic used to determine the answer, but it’s still fascinating.
I’m of a vintage where the concept alone used to reside in the realm of science fiction. When you add the use of natural language processing—Siri and Alexa, for example—you might feel like a crew member on the Starship Enterprise (is my nerdiness showing?).
I bring up this observation because it is highly relevant to the topic of intelligent financial planning and analysis (iFP&A) and dynamic planning, a subset of iFP&A. Thanks to technological advances, we now have tools that permit us to view the entire financial picture of our organizations in a matter of seconds or minutes, rather than hours, days, or weeks.
The term dynamic planning refers to immediate, insightful analytics that permit FP&A professionals to assist in critical planning and decision-making and to share insights equally quickly. Today’s tools help effectively bridge the data, analytics, action, and capability gaps that exist in all organizations, and that enhance the ability to assist in effective decision-making, with the ultimate goal of improved enterprise performance.
Dynamic planning is expected to become the norm in business over the next four or five years. The advances and acceptance of edge computing (data processing near the source of the data) will help accelerate this transformation. Projections are that companies will integrate edge computing in 40% of their projects by the end of 2021, compared to less than 1% in 2017.
Instant access to data increases the power to develop and execute strategies by enabling a clearer understanding of what is actually going on across the organization in real time. iFP&A professionals are thus better able to evaluate and set a strategic path while balancing short-term versus long-term drivers.
Dynamic planning can also assist with communications to key stakeholders. With a robust dashboard that follows IBCS standards and can be updated and revised on a “live” basis, the ability to explain what is occurring becomes easier and provides a larger audience a better understanding of the story. The requirement that FP&A professionals be outstanding “storytellers” becomes easier to achieve as the tools we use to explain and share become more relevant and useful.
Dynamic planning gives us the opportunity to:
By implementing dynamic planning, we can empower our FP&A executives and teams to check on major performance metrics and identify trends in real time. They can convert data into insights faster to run what-if scenarios on the fly as new data is received.
Brian is Founder and Principal at Kalish Consulting. He is Former Executive Director – Global FP&A Practice at AFP. He has over 20 years of experience in Finance, FP&A, Treasury and Investor Relations. He previously held a number of treasury and finance positions with the FHLB, Washington Mutual/JP Morgan, NRUCFC, Fifth Third and Fannie Mae. He has spoken all over the world to audiences both large and small hosting FP&A Roundtable meetings in North America, Europe, Asia and soon South America. Brian attended Georgia Tech, in Atlanta, GA for his undergraduate studies in Business and the Pamplin College of Business at Virginia Tech for his graduate work. In 2014, Brian was awarded the Global Certified Corporate FP&A Professional designation.