FP&A AI is coming, and it’s going to radically improve the way we perform financial planning and analysis.
AI is poised to shape the future of work, set to be a technological transformation on par with the global adoption of the internet. The AI market is projected to grow exponentially in the coming decade, altering in ways both big and small how we work. FP&A processes will not be outliers.
The AI revolution is approaching faster than you think: by 2025, 70% of organizations are projected to use both AI and ML to support data integrity verification and modeling tasks, in addition to performing the critical task of explaining why the numbers are the way they are (diagnostic analysis).
Source: https://www.linkedin.com/posts/bouchernicolas_4-types-of-data-analysis-1-descriptive-activity-7058522451676164098-0Ilt
In the near future, FP&A AI will be able to:
- Provide diagnostic analysis
- Assist with predictive analysis and forecasting
- Provide prescriptive solutions derived from your financial data, helping you make the right strategic decisions
- Perform all rote and repetitive tasks that are best done by a computer - and perform them with 100% accuracy
- Be the ultimately tech support and digital assistant
Let’s examine how AI can accomplish the above tasks with two discrete deployments of the exciting new technology: AI FP&A chatbot and AI pattern recognition.
FP&A AI Chatbot
Chatbots like ChatGPT have already demonstrated an astonishing capacity for sophistication, nuance, and understanding - it’s why the aforementioned large language model (LLM) is now a household name.
True story: I was at a wedding for an old friend and his mother (in her 70s) asked me about my job. I told her that part of my job involves writing articles. Her response? “Are you worried about ChatGPT? I tried it the other day and it’s amazing.”
The point? Even grandmothers are on board with AI chatbots.
There’s no reason that FP&A professionals won’t be able to leverage AI chatbots to play the role of do-everything digital assistant plugged directly into your FP&A software of choice, helping finance inform every critical decision, in other words - these things are so intuitive that even the most technologically disinclined are finding them fun and useful.
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Which brings us to what an AI FP&A chatbot will be able to accomplish in the near future:
- Troubleshoot issues
- Provide preemptive solutions
- Perform simple and complex tasks
Provide preemptive solutions
AI will not only be able to provide solutions to any issues you come to it with - but predict related issues you may encounter and provide solutions for them - and execute those solutions with the click of a button.
AI means an end to software frustrations and struggles.
Perform simple tasks
You will be able to ask your chatbot to perform a variety of tasks and have it perform those tasks perfectly - no matter how complex or simple.
These tasks can include:
- Create a user
- Integrate specific data
- Create a report with KPIs
- Industry/company specific functions
- Create a formula
To name a few.
This will save you hours of your time, allowing you to better analyze financial data, uncovering insights that inform decision making processes.
AI Pattern Recognition
While the AI chatbots promise a number of quality-of-life improvements to FP&A, the most arguably value is likely to come from AI-powered pattern recognition.
Finance teams are at their most valuable when they can thoroughly analyze financial data and uncover insights that can then inform future decisions.
The data can reveal all manner of important information, like which departments would benefit most from increased resources (based on historical data), vulnerabilities that need to be addressed given predictable market changes (risk mitigation), inform hiring decisions, inform pricing of products, inform product launch dates, identify companies to acquire, etc.
At its core, this is a function of pattern recognition - seeing relationships between numbers that in turn can be replicated to recreate positive outcomes or avoided to preempt negative ones.
That’s where FP&A teams truly shine - and where AI can be a fantastic partner.
Simply put, us puny humans can’t match computers when it comes to sifting through huge volumes of data. As AI develops, it will be able to perform highly complex pattern recognition, discerning relational connections between numbers that people can’t see.
These patterns can then be leveraged to provide CFOs and finance teams with actionable insights to bring to the boards, CEOs, etc., making them invaluable parts of the organization’s growth.
Anomaly Detection
Building off pattern recognition capabilities, AI will also be able to detect anomalies in your data.
The AI will be able to detect data points that deviate from expected behavior within a dataset - and identify why the anomaly occurred in the first place in addition to providing solutions to address the issue if one exists.
Since ML models function best on large datasets that allow them to ‘learn’ over time, this is an excellent application of AI for FP&A.
Limelight FP&A Software - on the Forefront of FP&A AI Technology
At Limelight FP&A Cloud Software, we’ve always prided ourselves on being innovators in the FP&A software space; we never rest on our laurels and are always on the lookout for ways to empower our clients to perform FP&A faster, more accurately, more efficiently - and with the ability to uncover greater insights.
Limelight already makes use of machine learning (ML) capabilities and plans to integrate a variety of AI applications to our FP&A platform in the near future (including everything mentioned above).
Discover more about our product and see how we’re already on the forefront of FP&A technology - and plan to stay that way with new AI capabilities.
