- Value: Leveraging SMAC to make budgets, forecasts, analysis more robust
- Efficiency, Effectiveness & Control: Leveraging SMAC tools in the FP&A process
Value: SMAC feed into FP&A
- Social & Mobile: The electronic footprints left every day on social media and mobile devices provide forceful inputs into budgets and forecasts. Market sentiments, customer behavior, trends and numerous such lead indicators show which way the wind is blowing. Some FP&A teams have increased accuracy of their budgets and forecasts by making this an essential part of their frameworks.
- Analytics: FP&A and analytics are very closely intertwined and together can enhance insights tremendously. The output of analytics becomes a feed into FP&A, while the flags emerging from FP&A become the topics of analytics. In the past, Analytics and FP&A functions stood alone in organizations, but now they are starting to converge (See The Changing Face of Financial Planning & Analysis for more insight into this).
- Cloud: Earlier, it was tough to digest capital spend on infrastructure. Cloud has enabled organizations to bite into this in smaller chunks, shifting Capex to Opex, much to the relief of CFOs. But they are now faced with a different challenge – cloud based spending is much more erratic and harder to predict since it fluctuates with the business, making it important to have stronger bridges between FP&A and the business.
Efficiency, Effectiveness & Control: SMAC tools in FP&A
- Social & Mobile: Collaboration is key to FP&A effectiveness. Email is the new snail mail – so organizations are using secure internal social tools to make this process much more effective. Gathering inputs, having discussions, and making iterations now happen online and are documented with accuracy for enhanced control. Executives have access to analysis and insights at the flick of a finger on their mobile devices and can also provide approvals faster.
- Analytics: Visualization/Business Insight (BI) tools are being embedded in the FP&A process to give quick visibility and drill downs. This has enabled the rapid turnaround of analysis after the books are closed as well as effective simulations and scenario modeling for better decision making. Adoption of statistical tools is however in the nascent stage.
- Cloud: FP&A pulls a huge amount of data in the enterprise together. Many firms are moving to FP&A in the cloud to make this easier and more elastic.