Gartner predicts autonomous technologies will impact FP&A and controller functions in finance in three ways

According to Gartner, Inc., financial planners and analysis (FP&A) executives and controllers need to have a plan in place to embrace the ways digital acceleration disrupts legacy processes in their functions.

“We are seeing widespread acceptance among financial leaders that technology is taking financial processes offline,” said Matthew Mowry, senior analyst at Gartner Finance’s research practice. “80% of CFOs we surveyed in 2022 expected to invest more in AI in the next two years, for example. About two-thirds of the CFOs we surveyed believe their functions will become autonomous within six years.”

To make autonomous finance a reality, broadly speaking, organizations need to go beyond investment priorities and rethink three aspects of their operations. They should consider: how features can enhance semantic models to improve data quality and transparency; how technology can increase the number of teams performing judgmental actions versus manual actions; and how autonomous finance can improve business performance by minimizing the burden of data analysis and decision making.”

To help FP&A leaders and controllers plan for the future, Gartner has made three forecasts for the impact of autonomous technologies through 2028.

By 2025, 70% of organizations will use data-enabled technologies such as graph analysis, machine learning (ML), artificial intelligence (AI), and blockchain as essential components of semantic modeling.

FP&A teams create reports and analyzes using data from multiple and often disparate systems. End users do not always have a clear understanding of these transformations and may end up mistrusting or misusing financial data in decision making.

“When poorly understood data is used and FP&A cannot explain its processing, decision makers often turn to instinct or intuition.” Mowry said. “Data provenance solutions hold the promise of better explaining data processing and increasing its transparency to decision makers.”

An increasingly regulated data environment, along with a growing volume of data and decision support requirements, is pushing organizations to look for more ambitious solutions to this problem. FP&A teams tend to see this as an IT initiative as it is tied to the enterprise data and analytics architecture. However, FP&A teams have the necessary skills and capabilities to manage this within the organization.

By 2027, 90% of descriptive (“what happened”) and diagnostic (“how or why this happened”) analytics in finance will be fully automated.

“There is a recent trend of analytics and business intelligence (A&BI) vendors acquiring data and machine learning vendors, indicating a desire to use these capabilities to automate the creation of descriptive and diagnostic information,” Mowry said. “Today’s A&BI platforms are shifting the focus from the analyst as a consumer to the decision maker as a consumer.”

While automated or augmented A&BI descriptive and diagnostic data can minimize the barrier to analytical skills, decision makers still need to understand and act on them. To remain relevant and competitive, FP&A leaders must help create continuous and evolving literacy programs for all employees, including senior executives.

By 2028, 50% of organizations will replace labour-intensive bottom-up forecasting approaches with artificial intelligence, leading to autonomous operational planning, demand planning and other types of planning.

“AI decision-making is just emerging as a practical, off-the-shelf innovation and is expected to mature over the next five years,” Mowry said. “While it’s available in many financial planning apps, it’s just not being used as widely, but we expect this to change significantly in the next few years.”

Organizations should test solutions where current decision management approaches leave a lot to be desired so that users feel more comfortable with AI in their decision-making process. Greater comfort with AI episodes will lead to greater serial acceptance and organizational momentum for further adoption.