FinTechAutomationUS survey shows FP&A investment yields efficiencies

US survey shows FP&A investment yields efficiencies

The Association for Financial Professionals’ (AFP) benchmarking survey suggest greater investment in financial planning and analysis (FP&A) systems pays off by eliminating routine tasks.

The US Association for Financial Professionals (AFP) reports that there is still a gap between the goals of financial planning and analysis (FP&A) – becoming a strategic function and a better business partner – and the reality.

In its latest FP&A Benchmarking Survey, the AFP suggests that the gap can be narrowed by making more time available to spend on high-level tasks. The survey examines the relationship between the percent of the total FP&A budget companies spend on technology and process efficiency and the amount of time FP&A staff spend on routine tasks or “grunt work”.

Based on responses from 255 FP&A practitioners across the US, the path forward to closing the gap appears to be investing more in FP&A systems. Among the findings:

  • FP&A functions at companies with larger technology budgets spend less time on grunt work and more time on real analysis. FP&A staff spent an average of 384 full-time equivalent (FTE) days performing routine tasks in companies that dedicate less than 10% of their budget to technology. In contrast, companies that spent between 10-20% on systems cut that number by more than half. Companies that spent 20 -49% reduced that number to just over 62 days.
  • Predictive analytics is a functionality many of today’s FP&A teams see as the next big step forward. Although only 18% of companies are fully enabled to use predictive analytics today, half of survey respondents expect their organisations to have such capability in the future.
  • Nearly a third (29%) of survey respondents have access to integrated data across enterprise sources as well as some external data, and they run both historic analysis as well as predictive algorithms. The majority of survey respondents believe that for their companies to be competitive, they will need access to real-time structured and unstructured data.

According to the survey, as FP&A departments close the gap between today’s traditional function and a more robust analytics group of the future, nearly half have switched to forward-looking forecasting techniques, such as driver-based modelling and rolling forecasting.

“Greater investment in technology liberates FP&A staff to do what they were hired to do, and what their organisations need them to do; namely, conduct robust analysis and forecasting to better inform their company’s strategic decisions,” said Jim Kaitz, president and chief executive officer (CEO) of AFP.

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