The State of AI and FP&A The State of AI and FP&A

The State of AI and FP&A

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Gaining Increased Transparency

USING PREDICTIVE MODELING

Employing Speed-Fueled Scenario Planning

Keeping Pace with Regulatory Changes

Redefining the CFO's Role

Optimizing AI

When integrating artificial intelligence (AI) into the workflow, every financial planning and analysis (FP&A) team experiences a unique journey, driven by wide-ranging factors and considerations. Some companies have embraced the leading edge of AI adoption, while others are just getting up to speed. The vast majority likely fall somewhere between the two. Yet regardless of where your organization lands on that spectrum, gaining a clear sense of the current state of AI and FP&A can provide useful information and insights. Both offer context, perspective, and guidance as you chart the course forward.

With that in mind, one word helps capture the essence of where AI currently stands in relation to FP&A:

optimization.

The overarching trend for AI and FP&A is the steady progress made in developing new tools and techniques that continually enhance the ease, effectiveness, and practical applications of AI. Specifically, these enhancements position FP&A as more of a strategic partner than stereotypical number crunchers. Therefore, understanding the various AI advancements and trends can prove valuable, regardless of the current situation within your FP&A team. If your AI operations are more advanced, tracking current AI trends offers a good benchmark to ensure all potential gains and benefits are captured.

Meanwhile, if you’re taking a more methodical approach to AI — or just starting out — gaining a firm grasp of current trends can help with the following:

Define goals more clearly

Provide aspirational milestones

Offer data-backed examples for further investment and adoption

In either case, incorporating AI into your FP&A work is fast becoming standard operating procedure. The AI momentum was captured in OneStream’s recently released survey Finance 2035: Return to Investment.

of CFOs believe that by 2035, AI and automation will completely reshape the finance function.

74%

believe that organizations that don’t invest now in tech, infrastructure, and skills won’t survive the next five years.

70%

CEOs

68%

CFOs

A BURNING PLATFORM

PER THE RESULTS,

The AI Landscape for FP&A: Top 6 Trends

AI is clearly here to stay. Accordingly, understanding the current environment and emerging trends is essential to charting your AI roadmap for the future. Here’s a closer look at the top six trends currently shaping the AI landscape for FP&A.

Optimizing AI

As previously mentioned, finding ways to optimize AI to deliver greater efficiencies, clearer insights, and better forecasting and scenario planning is vital. These optimizations are key to generating strong organization-wide buy-in and creating a competitive edge in the market. Software companies with a finance focus are fueling that trend by delivering and enhancing new, easier-to-use tools and offering more robust capabilities. A prime example is OneStream’s SensibleAI™ Forecast (formerly Sensible ML).

SensibleAI Forecast is a no-code solution that offers a host of benefits. For instance, it enables businesses to use ML to efficiently create highly accurate forecasts in a fraction of the time of traditional processes. Sensible AI Forecast also allows financial and operational teams to incorporate external data sets alongside proprietary enterprise data in models. Through this capability, teams can build in options such as macro data or weather events. Looking at past patterns, SensibleAI Forecast can also quantify the impact of company-specific or external events. It can, for instance, quantify how events such as how holidays, promotions, price adjustments, and supply chain disruptions impact predictions.

Redefining the CFO’s Role

The traditional role of a CFO serving as a reactive decision-maker is rapidly shifting to one of a forward-looking strategist thanks to AI’s capabilities. This notion is particularly true when it comes to dynamic forecasting and scenario planning.

AI’s advanced analytics and predictive modeling allows CFOs to simulate scenarios, anticipate disruptions, and identify opportunities before they materialize. Then, these insights can be applied to optimize key aspects of the business. Those aspects include supply chains, pricing models, and resource allocation. Plus, the insights can be used to identify and factor in potential risks. Organizations that quickly adapt and course-correct in today’s volatile economic environment can remain ahead of the competition and forge alternative paths to hitting strategic goals.

Keeping Pace with Regulatory Changes

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The 2024 election brought a new presidential administration and, with it, shifts in regulatory priorities. While significant changes to initial public offering (IPO) regulations are not expected, transparency and corporate governance are anticipated to take center stage. AI-powered tools can help organizations navigate this evolving landscape by streamlining compliance processes and ensuring operational maturity.

AI will play an increasing role in enhancing financial reporting and auditing capabilities, allowing organizations to align with new regulations while maintaining investor trust. By investing in these advanced technologies, businesses can stay ahead of compliance requirements and build a strong foundation for future growth.

Employing Speed-Fueled Scenario Planning

“What if?”

is a phrase that starts a lot of sentences by business leaders these days.The pace of change, persistent uncertainty, ongoing economic volatility — even extreme weather — leads to a wide range of scenarios. Notably, those scenarios could impact everything from supply chains and inventory to sales or buyer sentiments.

Historically, playing out those scenarios has been labor-intensive, requiring considerable manual intervention to wrangle and analyze data. That exhaustive process often left little time to draw meaningful insights from the data. Now, AI has brought revolutionary changes in this practice by automating and streamlining the process and generating scenarios that can be readily adjusted as changes occur in real time. The speed at which these scenario-based insights can be generated allows FP&A to confidently lead their organizations through uncertainty, mitigating risks while seizing emerging opportunities.

Gaining Increased Transparency

With inflationary economic pressures expected for the foreseeable future, AI’s predictive modeling capabilities can deliver insights that build resistance and inform better decision making. These capabilities are particularly valuable for managing costs and maintaining efficiency during periods of volatility.

By accelerating re-forecasting cycles, finance teams can quickly adjust to disruptions such as inflation, supply chain bottlenecks, or shifts in demand. This capability not only enhances operational efficiency but also positions organizations to maintain profitability and thrive in challenging environments.

Using Predictive Modeling

AI can deliver plenty of insights and help answer pressing questions. Yet how those insights and answers are surfaced is essential to avoid the potential “black box” of AI models. Such models lack explainable decision-making processes that could introduce compliance issues, security risks, or unintended biases.

Further, a lack of transparency or the inability to explain how insights were generated or data produced can create skeptics among internal partners. That skepticism can sidetrack robust AI adoption or, worse, result in no AI adoption and a failed AI investment. When adopting AI, savvy organizations invest in AI ethics frameworks to assure alignment between FP&A AI systems and corporate values, legal requirements, and stakeholder expectations.

The Path Ahead for FP&A

As AI integration increasingly becomes the norm for FP&A, CFOs must closely track trends to ensure AI capabilities are optimized and maintain a competitive advantage.

Your organization may be at the beginning of its AI journey or somewhere in the middle. In either case, gaining expertise and sharp insights into AI’s potential will help build confidence and buy-in among leadership and key business partners. Ultimately, that process will empower you to further position FP&A as strategic leaders. FP&A will, as such leaders, guide decision-making in ways that create the best opportunities for growth, profitability, and sustained success.

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