How CFOs can leverage purpose-built business planning and analytics

An array of innovative technologies is revolutionizing the capabilities of BPR&A, exemplifying the transformative shift in the role of the CFO. Utilizing these technologies and financial technology enables finance executives to significantly enhance both the conventional elements of BPR&A, such as regulatory compliance and financial reporting, and the generation of value-added, data-driven insights to an extent that was once thought impossible. 

However, AI-enabled reporting and planning don’t work unless decision-makers understand the cause-and-effect models behind organizational outcomes and agree to them. This understanding is crucial for ensuring that insights derived from AI are actionable and relevant to the organization's strategic goals. Without a shared comprehension of how various factors influence outcomes, the potential of AI in enhancing decision-making can be undermined.

CFOs most adept at harnessing this innovation are those who comprehend the necessary scope of change: streamlining planning and reporting processes with emerging technologies, revisiting organizational models, and addressing talent requirements to drive long-term value.

“Finance professionals have been engaged in BPR&A tasks for years, and the inquiries that CFOs seek to address today frequently mirror those of the past: What’s my market position? Am I meeting or falling short of my objectives?” explains Kevin Brown, EY US Principal, Consulting Services and Life Sciences Technology Lead. “However, these tasks are no longer suited for manual labor; they’re prime candidates for automation and AI. The use of emerging technology opens doors for CFOs to allocate their time toward expanding the boundaries of what can be achieved — to investigate, measure, and delve into more innovative opportunities.”

Moreover, AI-powered forecasts don’t work unless decision-makers trust them and are willing to be accountable for targets set with AI help. Building this trust requires transparency in how AI models generate forecasts and a commitment from leadership to integrate these insights into their decision-making processes.

Reimagine BPR&A capabilities

As data volumes expand exponentially and the speed of its collection and analysis accelerates, analytics emerges as a pivotal element in defining the future role of finance as a strategic business partner. Technology and financial technology are set to play a central role in this evolution, streamlining processes to verify that reports are not only rapid but also effective and trustworthy. The 2023 EY Global DNA of the CFO Survey underscores this trend, pinpointing advanced data analytics and technological innovation as the foremost priorities for reshaping the finance function in the next three years. 

The synergistic effects of technology and data have ushered in new methodologies for BPR&A. For instance, planning and forecasting technologies have the potential to enhance outcome prediction, opportunity identification, and risk management through scenario modeling and machine learning, while automation of financial reports, including income statements, balance sheets, and accounts receivable/payable, promises improvements in accuracy and efficiency.

Define a strategy and the metrics for success

As the capabilities of BPR&A expand, CFOs must actively seek innovative ways to refine their strategic approaches and stand out. A transformative BPR&A strategy must be deeply integrated with the company’s overall strategy to bolster and propel it forward.

In the process of executing these strategies, CFOs are tasked with finding creative ways to enhance their strategic methods and differentiate themselves. For instance, a company might now evaluate its brand strength by mining social media data to see how frequently its products appear in uploaded images — a metric that was once inconceivable.

Each organization will encounter its own set of challenges and strengths as it progresses, but for Brown, the path forward is clear. “Develop a plan that’s crafted for the future, containing manageable increments of progress that not only steer you in the right direction but also allow for reflection, learning, adaptation, and advancement.”

Reconfigure what your people do and how they do it

CFOs are encouraged to lead the charge toward a digital-centric approach. By demonstrating their own willingness to evolve and adopt new practices, CFOs can inspire their teams to follow suit.

Further, CFOs must thoughtfully cultivate their teams to leverage technological advancements. Building a team with a broad range of skills, from financial expertise to data science knowledge and technological proficiency, is critical. Such a multidisciplinary team is key to offering strategic insights for business decisions and establishing credibility throughout the organization.

Brown emphasizes the significance of embracing emerging technologies, stating, “AI is not going to take your job, but someone who knows AI will. Everything we do is going to be augmented by AI, and you can either drive that transformation or be impacted by it.”

Evolve the operating model

Just like any transformation, it takes cross-functional collaboration to advance BPR&A capabilities. As it becomes easier to automate more of the work done today, it’s worthwhile to explore new operating and staffing models, involving contract workers, outsourcing, and centralization in centers of excellence. Professional services organizations are promoting managed services and other accelerators as companies attempt to thread the needle on gaining technology, talent, and optimized processes in a future-focused way.

Similarly, alliances can be explored as an alternative to the “build or buy” paradigm. Through such partnerships, companies can quickly access leading-edge analytics and machine learning algorithms that enhance forecasting accuracy and provide deeper insights into financial performance. Alliances can also drive innovation by introducing leading practices and new methodologies for data-driven decision-making. 

“The swift evolution in BPR&A calls for a recalibration of strategy,” notes Deirdre Ryan, EY Global Finance Transformation Leader. “Finance leaders must embrace innovation and agility to push past established limits and recast the role of finance as a catalyst for strategic direction and enduring value.”