What new capabilities, technologies and process upgrades will make our forecasting more dynamic?
Reporting-as-usual won’t cut it in today’s business climate. These essential tools will help finance teams make the transition.
A hammer isn’t going to help when all you have are screws. That nagging sense of a fundamental mismatch is increasingly familiar to CFOs as they try to meet the demand for intelligent new forecasting capabilities by continuing to hammer away with yesterday’s financial tools and processes.
In the past year especially, many CFOs discovered that “the way we’ve always done it” is just no longer enough to adapt to today’s fast-moving, ever-changing business climate. The C-suite wants more agile forecasting and insights—faster, smarter and derived from multiple new data sources—while the finance team is still working from one-and-done budgeting and rearview-mirror reporting.
It might be time for the CFO to find a better hammer. Upgrading to new technology solutions and platforms—and ones that are accessible from anywhere—will help reduce future risk and keep businesses operating efficiently. (And we’re not talking about better video conferencing!) Today’s emerging tools allow leaders to create forecasts in minutes, adjust strategies to keep KPIs on track and make bold shifts with confidence, knowing that the data supports the decisions.
Our KPMG finance experts have been working with clients to help them rethink their current forecasting processes and identify the right new technology tools that will empower their finance teams to meet the growing demand for more agile and insightful reporting. Here are three key technology capabilities that consistently bubble to the top as critical ways to move finance from yesterday’s forecasting processes to tomorrow’s more intelligent forecasting potential.
1. Predictive Analytics
There’s never been as much information—and access to that data—as there is today. Businesses track more internal stats, plus there’s now a seemingly endless array of external data an organization could consider incorporating into its planning. But when it comes to data, of course, quantity is not always indicative of quality. That’s why successful finance leaders increasingly are turning to artificial intelligence (AI) and advanced analytics to rapidly sift through the data and identify short- and long-term priorities.
AI can access and analyze tons of data from both inside and outside the organization—information that often hasn’t been considered before. This wealth of untapped data can lead to new insights about what drives the business, uncover new competitive threats and identify new markets. Add it all up, and the result is more accurate forecasting in less time—which means more time for managers to focus on strategic thinking and creative execution.
Read our full report, Analytics and AI Are Central to the Future Success of the Planning Process
2. Data and Signals
Artificial intelligence is a technology necessary to meet the challenge of finding relevant data and then mining that data for the business by developing applicable signals. But AI alone doesn’t cut it. Finance will also want to consider a technology that does all of that and also continuously monitors changes in any of the identified factors. This way finance leaders can rest assured their forecasting models will always be as up-to-date as possible.
Enter the KPMG Signals Repository. This platform collects more than 10,000 predictive signals from a broad variety of data sources. With machine learning and AI, KPMG Signals Repository pinpoints and continuously harvests the right internal and external factors for a specific business. This generates significantly more accurate predictions, so the organization can make meaningful decisions and directly improve business outcomes. In short, KPMG Signals Repository turns the endless amount of data into actionable insights, automates decision-making and helps organizations reach their objectives.
3. Enterprise Performance Management
With all the planning, budgeting, forecasting and reporting tools available to finance organizations, it’s essential to have one place where they all reside. Otherwise, simple tasks can take twice as long simply due to the hassle of jumping from one interface to the next—and then back again. Inefficiencies like these are just not sustainable in the “new normal” of business volatility.
Leading finance organizations use an integrated, cloud-based enterprise performance management (EPM) platform that is uniquely tailored to their business, rather than trying to plug-and-play an out-of-the-box EPM. A custom EPM can start with advanced tools like data visualization and dashboarding that turbocharge forecasting and insights from the finance team. Cloud EPM platforms can be steadily enhanced with add-ons that help managers identify the appropriate internal and external signals that drive their business in a meaningful way. With this data, an EPM solutions can forecast more accurately, analyze and report business scenarios, and ultimately improve profitable growth.
With the combination of these three technologies and capabilities, keep in mind that none will work if the organization isn’t primed for it. You need to have the right people, with the right mindset and training, so that the technology can enable them to execute at their best—and to start hammering out forecasting innovations with useful new nails, rather than all of those old screws that have been lying around for years.
Find out more: Download the Analytics and AI Are Central to the Future Success of the Planning Process report, and learn how KPMG Signals Repository and Enterprise Performance Management can support your business goals.