FINANCE
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PHIL YOUNG
AI won’t kill FP&A if it can reinvent itself as a trend-selector
FP&A should cool it Phil Young PhD is an MBA professor and corporate education consultant and instructor
A crucial group within a company’s change, but are themselves change agents. business function is financial planning and One of the ways that they can instigate analysis (FP&A). Essentially, this team is change is through innovation. responsible for forecasting key financial So what of our friends in FP&A? indicators, such as revenue, profit and How can they work faster and be more cash flow – and for tracking and analysing innovative? Here’s one example. a company’s performance as it strives to We all know that bricks-and-mortar achieve its financial goals. Yet some fear retail is suffering because of online these folks’ days are numbered. shopping. Let’s imagine that you A recent Harvard Business Review work in FP&A for one of the major webinar on Agility and the Future high-street chains. of Finance predicted that artificial One of your core roles is using intelligence (AI) will soon relieve FP&A historical data on the financial of many of its current duties, such as performance by such categories as managing and analysing databases. In fact, store, city, state, province, country if I’m not mistaken, the speaker said that and product-mix to forecast sales, the FP&A workforce of the future would profit and cash-flow for the next year, be much diminished because of it. I’ll quarter or month. The degree of speed leave you to imagine the and granularity of chatroom fallout from reporting will depend the FP&A executives on the needs of senior Understanding within the webinar management and your trends and audience! IT set-up. responding to them is However, I think Could AI or the future of FP&A their concerns may ‘machine learning’ be premature – if not augment or replace this entirely unfounded. type of FP&A work? I There is plenty of opportunity for FP&A to think we all know the answer. prove its worth in the ‘agile’ world of AI But suppose these companies finally and digital disruption. see the light that traditional retail must In business, terms such as ‘agile adapt to changes in retail shopping by leadership’, ‘agile organizations’, opening pop-up stores that not only and ‘agile workforce’ have become introduce new or highly curated products commonplace. If you are a financial to trendy shoppers, but also give them professional, you will most likely have Instagram photo-ops? heard the term ‘agile finance’. Can these traditional retail giants Without trying to provide a complete get into the pop-up store business in definition of ‘agile’, I can safely say that a fast and profitable way? Who would this term is generally associated with the C-level executives turn to for the flexibility, innovation and speed. In my business-case on this idea? Is this job a view, these traits have always been an natural fit for FP&A? I think so. important part of a successful enterprise. So, worry less about robots and AI, But the rapid changes in technology and and embrace the human element. To help growing intensity of global competition make a good business decision, we need have made them so important that they some real people with financial skills, deserve to be put under the umbrella of business acumen and a sense of what’s a single word. cool and awesome in the world. We hear people say that agile workers Understanding trends and responding are those who not only adjust quickly to to what’s coming is the future of FP&A. Q2 2019 Dialogue