Harnessing AI in FP&A: Strategies for Success
Watch the Workday AI webinar here: Harnessing AI in FP&A: Strategies for Success | Workday
AI is changing how people work daily, and the pace at which the change is coming is breathtaking. Many of us are struggling to keep up, so I recently joined Greg Volpe from Workday to discuss how AI is impacting FP&A, and what we can do to prepare ourselves and our teams for success. With over 1,400 people registering for the webinar, it speaks to how salient the topic is for FP&A professionals. FP&A professionals realize AI has enormous potential, but many are still trying to figure out how and where to use it within their company best. In this article, we will discuss many of the topics covered during the recent Webinar and provide thoughts on the value of AI, challenges with adoption and steps to implementing AI.
The Impact and Value of AI in FP&A
Artificial intelligence is no longer a futuristic concept but something that people use on a daily basis. Artificial Intelligence has many different ways it can help us in FP&A; listed below are a few ways:
Predictive Forecasting - The use of Machine Learning and statistical modeling can often help us build more accurate forecasts than we could on our own.
Data Anomaly Detection - With AI, we can have built-in data anomaly detection to help us identify issues in the data before we even look at it.
Auto Variance Analysis - With AI, we can have the software write the why for our variance commentary, substantially reducing the time it takes to complete our monthly variance commentary
Conversational AI - Using LLM models, we can ask questions of our data and get immediate answers that help us better understand our data
Scenario analysis - AI can help us conduct scenario analysis and come up with different potential situations and outcomes that we should include in our scenario analysis
These are just a few of the many ways that FP&A teams can benefit from Artificial Intelligence. The capabilities will improve efficiency, provide greater agility in our work, and enhance our forecasting and analysis accuracy. Many are worried that AI will replace us as humans but what we are seeing so far is that AI, when embraced by humans, allows us to be much more efficient.
We are seeing several real-world examples of how AI is helping FP&A professionals, from improving forecast accuracy to writing complex formulas in our spreadsheets. One example that Workday shared is how Team Car Care, the largest Jiffy Lube franchise, used machine learning to improve store-level forecasts by incorporating weather data. Read the full story at Customer Story Page.
Challenges to AI Adoption
Despite all the talk about AI, many finance departments are still figuring out how to adopt AI. It is one thing to use a publicly available model but trying to integrate AI within your work streams becomes a much bigger challenge. Every company will face challenges trying to implement AI. Below are several of the most common challenges we will face.
Resistance to change: Employees may view AI as a threat to job security and lack trust in its capabilities. Most people will resist change, especially when it first comes.
Reliance on legacy systems: Outdated systems can complicate AI integration. The older your technology, the more challenging it will be to integrate AI throughout your processes.
Regulatory and ethical concerns: There are valid concerns regarding data privacy, security, and the need for regulatory frameworks to keep pace with AI innovation. For example, accounting professionals are waiting for guidance from the Big 4 accounting firms on what documentation is needed for audit compliance when using AI.
Skill shortages: Organizations may struggle to keep up with the pace of AI innovation and find professionals with the necessary skills. Using AI requires development of new skills, and many people believe FP&A professionals will need a better understanding of the basics of data science and coding, such as Python, to get the most out of AI.
Concerns with data quality: AI relies on high-quality data, and data quality issues can hinder AI adoption. The reality is most companies still have issues with their data and many will need to clean their data before being able to fully leverage AI.
Every company should be aware of the challenges of AI and develop plans to overcome these challenges. These challenges should not stop you from finding ways to use AI because if you do not learn to be more efficient with AI, you will get left behind. This is true of individuals, finance departments, and companies as a whole.
Steps for Getting Started with AI
Below is a list of several practical steps we discussed during the webinar that will help you get started with using AI.
Define AI requirements: Align AI goals with business objectives and identify short-term wins. Without clear requirements, it will be challenging to implement and measure the success of your AI project.
Start Small: Take a human-centric approach, phase in deployment, and drive a “learn and grow” mindset. Do not try to do everything at once, and make sure to gain small wins along the way.
Realign FP&A skills: Embrace AI, identify AI champions within the team, and promote AI fluency through training. It becomes difficult to keep the momentum going without training and AI champions to support the team.
Prepare data: Prioritize data quality, prepare historical data, incorporate external data sources, and establish strong data governance. Remember, “Garbage In, Garbage Out” applies to AI.
Vendor Selection: Choose a vendor with market-leading AI capabilities, a unified data model, and a proven innovation track record. It is essential to make sure you select a vendor that can support you on your journey and will be around to help you in the future.
Like any project, the key to success is ensuring you have a well-thought-out plan, commitment from management, and a process to manage the change and support and encourage your team throughout the process.
Key Takeaways
AI can be a game-changer for FP&A, offering the immense potential to improve efficiency, accuracy, and strategic decision-making. However, in order to recognize the benefits of AI it will take patience, commitment, and a willingness to learn. Do not let yourself be left behind on the AI journey. If you would like to see how Workday is leading the charge when it comes to AI and FP&A professionals, click here to learn more.
Note: All images in this article were created using Google’s AI tool Gemini