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A recent AFP report shows big gaps remain between FP&A teams’ desire to embrace digital transformation and their ability to make the most of the tech they have.

The Association for Financial Professionals (AFP) put out its latest FP&A survey this week. The survey is focused on tech and data trends in FP&A, in particular the quality and accessibility of data, and features some illuminating (and disappointing) findings about FP&A in 2020.

It’s been a big year for FP&A

The proportion of daily, weekly and monthly forecasts has increased significantly – 80% of firms in 2020 said they were doing forecasts at these frequencies, compared to 57% in 2019. It shows just how much this year and the disruption of the pandemic has accelerated the need for quick, accurate and up-to-date forecasts on both routine schedules and unforeseen events. Organisations need to adopt the technology and tools that allow them to do that, or risk spending too much time creating reports that aren’t timely enough to be valuable.

Data gathering is bogging teams down

Finance teams are spending 49% of their time gathering and preparing data. This is roughly the same amount of time they were spending a decade ago. In that time, the tools that automate the sorting and gathering of data came on in leaps and bounds, but finance functions, it seems, kept on doing the same thing.

Nearly 40% of FP&A teams taking part in the survey said that they have hired data and IT professionals to manage data or train analysts. This is a proactivel step towards taking a more effective approach to data gathering and sorting, but if transformation had been done correctly, it wouldn’t be needed. Based on the uptake of planning software, it seems that teams are not getting the foundations of their data structure right before bringing in new software solutions.

Automation is being more widely adopted – but manual processes still make up the bulk

While FP&A teams are embracing automation, they are still extremely reliant on manual processes; 92% of respondents said that they used spreadsheets on a daily, weekly or monthly basis. More – 97% – supplement their planning system with spreadsheets, while almost three quarters (73%) said that data must be prepared through spreadsheets prior to using it.

Considering the previous point, this isn’t surprising. The biggest barrier for FP&A teams when it comes to embracing a digital finance function is data. More work needs to be done to improve that data foundation to bridge the gap between systems. As the AFP puts it: “While single-point solutions solve a particular need at a particular time, companies need an enterprise roadmap that charts the flow of data from multiple sources to multiple uses, adds automation throughout the process, and ensure their teams embrace the new systems and tools.”

FP&A teams don’t have the skills or resources for a digital future

It’s very much a case of the spirit being willing but the flesh weak when it comes to adopting a more digital, data-first future. Just 26% of respondents felt they had received more of the training they needed for processing and analysing data this year compared to 2019. Similarly, only 38% of respondents said they had the tools and resources they needed to do their jobs.

FP&A teams know what they need to do to move into the future, but doesn’t feel like it’s equipped to fully embrace it. It needs the buy-in of the company leadership.

With more uncertainty set for 2021, FP&A will be under even more pressure to deliver regular reports and forecasts. The digital finance function is no longer an aim to strive for – it’s a necessity.