CFO Insights: Provoking the Future: How CFOs Can Take Action to Illuminate Uncertainty

“Build scenario-planning muscles. In a linear world, it was customary to consider a dominant version of the future and construct possible variations around it. Now, with so much about the future up for grabs, CFOs need to have sufficient humility to acknowledge that nobody knows how things are going to turn out and to consider multiple, equally plausible futures. As they explain that future using numbers and models, the gaps will enable them to identify uncertainties. As the actual future develops, they may adjust those scenarios dynamically. Every five years, they may even have to start over.”

Read More at Deloitte >

FP&A Trends: Advanced Analytics as an Attribute of FP&A Maturity

“We can mix and match and decide which initiatives will be executed in response to scenarios A, B or C…This is a quite technically demanding exercise and shouldn’t be performed in Excel or any other tool with manual data entry.”

Read More at FP&A Trends >

CFO Magazine: 3 CFO Priorities for An Unstable Time

“CFOs are asking their crews to sail across the ocean without a map. Finance chiefs need to step up their focus on reliable demand forecasting.

Technology can be a major help. Has your company’s finance group started using digital tools such as predictive analytics and business visualization applications?  These tools improve management’s understanding of business drivers and their impacts.”

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CFO Journal: Moving Enterprise Business Planning Into Action

“CFOs are uniquely positioned to lead the coordination needed for an EBP program, given their experience partnering with operations, manufacturing, sales and marketing, engineering, the back office, and external allies. A key component of any EBP program is establishing consistent and current data from all sources—another goal that most CFOs share—that can drive advanced scenario modeling and predictive analytics to produce timely and more accurate plans.”

Read More at The Wall Street Journal >

FP&A Trends: My Top Five Predictive Planning Lessons

“Ask people what predictive analytics is about – they might mention a crystal ball or sci-fi novels. In practice predictive analytics has nothing to do with black magic or rocket science. It is a proven and robust technology, based on math, that can bring concrete benefits to finance organisations, when rightly used.”

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CFO Journal: The Inflation Outlook: Preparing for the Unpredictable

“In order to help executives prepare for a future no one can predict, Deloitte recently developed a set of scenarios to explore the question: How might inflation evolve in the U.S. over the next three years, and what could be the impacts on large organizations?“

Read More at The Wall Street Journal >

CFO Journal: Moving Enterprise Business Planning Into Action

“Scenario modeling and predictive analytics are critical components of EBP’s one-model approach. For example, semiconductor demand is subject to volatility, as the need for chips must react to demand from multiple industries. Moreover, supply is constrained by the availability of critical inputs. Robust scenarios provide management with a ready course of action as incidents occur. Predictive analytics can also leverage external macro data to better inform those scenarios.”

Read More at The Wall Street Journal >

FP&A Trends: Navigating Uncertainty with Scenario Planning and Predictive Planning

“After careful consideration on how to extract much more value from forecasting activity while spending significantly less time on it, it’s been decided to

1. adopt a driver-based approach to forecasting, model strategic levers and resource allocations; 
2. build an integrated FP&A eco-system through standardising, centralising and integrating core FP&A processes in the FP&A Centres of Expertise.”

Read More at FP&A Trends >

Institute of Management Accountants: Overcoming FP&A’s Biggest Challenge: Predicting the Future

The Institute of Management Accountants released a report that “is designed to serve as a guide for organizations trying to forecast what’s ahead in their markets”. It poses and expands on these 9 ways to improve forecasting in the future:

1. Expand the data available
2. Tools: Start small and add on
3. Use scenario planning
4. Address the knowing-doing gap
5. Model Building: Think causality
6. Establish data collection systems
7. Improve assumptions and estimates
8. Monitor results and quickly identify the business reasons behind variance
9. Improve analytical skills

Read More at Institute of Management Accountants >