2019 will be turbulent. Investment in FP&A technology will increase, but it's not going to be in AI or block-chain, it will be more focused in getting the underlying finance infrastructure fixed. Investing in AI and block-chain now would be like investing in a Ferrari but not bothering to fix the road. The car may go fast on a race track, but in reality, all you have is a dirt bumpy road with potholes.
#1 Lying vs. Ethics will continue to be in the spotlight
Too often we’ve seen companies fail, not because they’re not delivering, but because they lied. Reality and fiction will continue to be in the spotlight, with little accountability. Lack of accountability for lying seems to be a trend that’s growing – companies that make stuff up and then get caught, they just move onto the next lie. In finance, professional ethics and conduct will be challenged but these qualities are front and center of our profession. We need to ensure as a whole that the profession does not get caught up in these lies. Reading Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou, the story about Theranos - what amazed me was that they were able to keep the lie going for so long. This is a shining example of Finance asking the tough questions and remaining committed to a high level of ethics at any cost. For me the only positive learning was in 2006 the CFO at the time questioned the viability of the company's solution – he was subsequently fired and they didn’t replace him and the company continued to operate until they closed their doors in 2017.
#2 Robots are Not FP&A bound...Yet!
AI, ML are more than a year away; Artificial Intelligence and Machine Learning are here…but finance is not an easy win. From our research, we’ve found companies have been underinvesting in Finance for a long time – the result is the infrastructure is old and in need of a serious overhaul. So layering AI and ML on top of old systems that don’t talk to each other may not have the desired effect that everyone is talking about.
#3 2019 is Fraught with Uncertainty. Cloud to the Rescue!
Companies are waking up to the fact that technology in Finance is moving ahead, and leaving them behind. They need to catch up quickly and are starting to realize they only way they can do it in a short time frame is to invest in cloud. Yes, the ideal is to replace the current ERP, but that’s a 3-year project and the costs are significant. If FP&A’s single goal for 2019 is to help reduce uncertainty, then a 3-year project is not going to help. The need is for something that can have immediate impact and be set up in 8 weeks. With a focus on drivers based planning and a faster feedback loop, critical forecasting will be back on track to handle 2019’s uncertainty.
I’m excited for 2019 – our research shows that companies are aware that they have underinvested in FP&A and now it may be at a critical tipping point. The value of FP&A to an organization is directly proportional to uncertainty i.e. when business is perfectly predictable we have very little value to offer – however I think 2019 is going to be a bumpy year…drive quickly & watch out for potholes!