AI & Machine Learning Impact on FP&A
Chris Ortega
Fractional CFO ???? Empowering Businesses with Financial Clarity and Strategic Growth | Founder & CEO @freshfpa | FP&A, Finance & CFO Thought Leader | Financial Leadership | Former Amateur Boxer ??
In July 2017, I presented at the 2017 AICPA FP&A Conference in Las Vegas over AI (Artificial Intelligence) & machine Learning impact on FP&A. The session received great feedback from attendees and other speakers. So, I wanted to share an article summarizing the presentations main points. The goal of this article is to provide insights into the impact AI & machine learning will have on people, processes and technologies in FP&A. Hope you enjoy!
"The future of AI and machine learning as it relates to finance and accounting will revolutionize businesses and value of these teams." - Chris Ortega
Impact #1: Chase for 3 I's
The first impact AI & machine learning will have on FP&A is around the 3 I's which are introduction, implementation and integration. FP&A will be laggers in adopting these tools within our teams and businesses which means these factors will be vital to increasing our value proposition. Most organizations will do well in introduction and implementation, however few organizations will adopt the value and trans-formative aspects of AI highlighting a breakdown in integration. What do I mean by integration? Integration is where the tools, theory and application of AI & machine learning become entrenched in decision making and business processes. Additionally, AI & machine learning becomes part of the companies DNA and basis for business execution. So, the chase for 3 I's will impact FP&A by becoming part of the company culture.
Impact #2: Team Evolution
Your probably asking yourself, "Chris this is very general. Come on, man." However, what I mean by team evolution is improved balancing of low & high value activities within FP&A teams. AI & machine learning can eliminate focus on low value activities such as data aggregation, data mining and turning data into information. I am not saying AI & machine learning will take your job but it will align your people/teams on high value activities. Most companies are cash strapped or resource constrained but if AI & machine learning is integrated correctly. Then, FP&A teams will have more time to focus on high value activities such as strategic planning, business partnership, and predictive analytics. Also, gone are the days where doing business the same way you have been for the past 20 or 30 years and expecting to remain relevant is business suicide. So, team evolution and activity balancing will be direct benefits of AI & machine learning.
Click on the link above to see a snippet of my presentation and feel free to purchase the full video.
Impact #3: DATA X
What do I mean by Data X? The best way to describe it is through a example. When I was in my hotel room in Las Vegas during the conference, I wanted to watch a movie. I found what I wanted to watch in minutes. AI & machine learning will bring the same self-serve and on demand data to FP&A teams. Think of Data X as Siri or Google Now which helps you get answers, directions, or facts quickly. AI & machine learning will bring the same elements to FP&A by asking, clarifying, or communicating financial or non-financial data in seconds. For example, asking Herman (makes sense if you visited the link above), what was total revenue for the past 6 months?" Or, what is our sales forecast for next quarter? Data X is the combination of tools, machine learning and providing quick reliable/actionable data instantly. Furthermore, companies such as Microsoft, Tableau, and IBM are already exploring and developing these features and the impact it will have on FP&A will be a game changer.
In conclusion, AI & machine learning is your friend not your enemy and not going to take your job! However, organizations/teams pushing the limits and testing capacity/value of these tools will benefit tremendously. My 5 - 10 year outlook is tomorrow's FP&A teams/leaders will utilize AI & machine learning as another avenue to accelerate knowledge sharing and data decision making to drive business results. Let me know your thoughts, perspectives or insights on how you think AI & machine learning will impact FP&A by commenting below. Lastly, keep pushing & never settle! #AI&FPA #bffs?
I'm 0,1% interesting and 99,9% interested/ Interim Executive
6 年Perfectly executed article. Been thinking how AI and ML will (and can?) impact FP&A to optimize processes.
You hit the bulls eye Chris. I think FP&A is likely to adopt AI/ML much faster than other finance functions. FP&A Analyst spend around 50% of his/her effort on data collation, enrichment and validation/verification of data across multiple applications, which elongates the time to report, and leaves limited time for analytics and driving actionable insights. Most of these jobs are repetitive in nature and there is more scope for improvement. Finance functions can generate actionable insights by reporting data faster to enable real-time decision making.
Excellent article, sharing this Chris!
Thank you Chris Ortega, MBA for sharing your thoughts. Indeed, Machine Learning and AI are now embedded in the FP & A (CPM/EPM) software solutions with predictive analysis playing an important role through relevant insights to make better and faster decisions.
ACP Mentor, Founding member of Ben Franklin Junto, college lecturer, Meals-on-Wheels volunteer and OLLI course instructor.
7 年I am giving a RISE OF THE ROBOT ACCOUNTANT talk to the DFW chapter of the Institute for Management Accountants next month. I am sharing what I believe will be their job description in 2025, including experience writing algorithms (similar to Excel macros). To be successful now or 2025, accountants don't have to be better, but they will have to be different than they are in 2017.