Advanced Analytics As An Attribute To FP&A Maturity

Financial planning and analysis(FP&A) is a set of intricate processes that help you track, analyze, and improve your business’s financial health. FP&A maturity deals with enhancing each of these processes across multiple facets, including functional skills, leadership, business partnership, collaboration, etc.

Over time, the prominence of advanced analytics has increased significantly in FP&A solutions. Most advanced analytics solutions make the machines think and analyze like humans, helping businesses make sense of their vast and complicated datasets. Processes like forecasts and behavioral predictions form the core of advanced analytics.

Let us look into a few important aspects that justify the role of advanced analytics as an attribute to FP&A maturity.

Understanding The Stages Of FP&A Maturity

To realize and implement FP&A maturity, it is important to understand its different stages. While the early FP&A maturity stages deal with diagnostic and descriptive analytics, the later ones emphasize predictive and prescriptive analytics.

Many businesses are still stuck in the initial stages due to a lack of suitable software solutions that pull them out of the past. While the past cannot be undone, the best way to move toward FP&A maturity is to make the future secure.

This can be done by understanding the key business drivers and the gaps that need to be filled using modern FP&A solutions. For this, analysts and IT experts recommend the 80/20 rule. Here, businesses are recommended to allocate only 20% of their time and resources to what happened and how it happened (with respect to their historical data). The remaining 80% of their time and resources should be spent on how things should be and what results they are aiming to achieve.

Understanding The Maturity Of Your Business Analytics

While business analytics is a feature used in almost every business management tool, it is important to understand how mature the solution is. If your business analytics solution leans more towards descriptive and diagnostic assessments, you need to shift to a more mature solution.

A mature business analytics solution will be more prescriptive and predictive in nature. It will prepare you for the future and help you manage your risks effectively.

Focusing On Scenario Management

To optimize advanced analytics in the interest of FP&A maturity, it is advisable to focus on scenario management instead of scenario planning. Moreover, experts recommend focusing on a handful of scenarios of a considerable magnitude instead of thousands of smaller ones to perform analytics.

The ideal way to manage scenarios is to use initiatives as a response to a specific scenario and quantify a P&L impact for each initiative. Implement a modern FP&A solution to streamline and automate these processes to ensure seamless scenario management.

Use Advanced Analytics For A Mature FP&A Solution With VIZIO

VIZIO helps you implement mature FP&A solutions with advanced analytics that provide you with valuable insights. Our team of IT and business experts help you optimize the right software solutions to facilitate seamless analysis of your business data, irrespective of its complexity.