Survey: Forecasting Services to Remain in Demand in 2021
Limited ability to meet increased service requests threatens to hinder finance teams’ effectiveness, according to the 2020 AFP FP&A Survey.
December 8, 2020 -- Bethesda, Md. -- Demand for forecasting services increased throughout 2020 and is expected to remain at the elevated level, according to the 2020 Association for Financial Professionals® (AFP) FP&A Survey, underwritten by Workday, Inc.
This year’s coronavirus pandemic, economic shutdowns and information uncertainty led business management to demand a higher level of forecasting to interpret impacts emanating from the volatile business landscape. FP&A met this challenge in 2020, as 23% of FP&A teams forecasted on a daily or weekly basis in 2020, up 9 points from 2019. Similarly, a larger share of organizations has been forecasting on a monthly basis in 2020 than in 2019 (56% compared to 43%). These trends of forecasting more often are projected to accelerate in 2021.
The current and projected increase in forecasting is part of what FP&A professionals see as a data-centric future. Fortunately, two-thirds of respondents use a dedicated planning system, and automation has found deep penetration in reporting.
Unfortunately, spreadsheets and manual processes remain the bedrocks of operations in both planning and analysis, and FP&A still spends half its forecast time in data gathering and data preparation, the same percentage as a decade ago. This is both a cause and effect of lacking end-to-end data flows through finance.
As a direct response—and maybe a threat to current practitioners—nearly 40% of FP&A respondents indicate they have hired IT and data professionals directly to join their teams, either to manage data or to train as analysts. But the application of advanced tools remains out of reach at many organizations.
“It’s imperative that FP&A gets this right,” said Jim Kaitz, President and CEO of AFP. “Such increased demand for FP&A’s services requires efficient process execution; otherwise, forecasting will absorb all the team’s time and resources.”
“Throughout the pandemic, we’ve seen organizations around the globe fundamentally change the way their businesses operate. From shifting forecasting yearly to quarterly, to even daily, embracing uncertainty has evolved the way leading companies leverage automation in scenario planning and continuous planning to thrive in this new normal,” said Michael Magaro, Workday Senior Vice President, Business Finance and Investor Relations
In August 2020, the Association for Financial Professionals® (AFP) conducted a survey of FP&A professionals about tools they are using to examine and analyze data. AFP received 484 responses from FP&A practitioners. These responses form the basis of this report. If you are a member of the press and would like a copy of the survey or have any questions, please contact Melissa Rawak at firstname.lastname@example.org.
Headquartered outside of Washington, D.C. and located regionally in Singapore, the Association for Financial Professionals (AFP) is the professional society committed to advancing the success of treasury and finance members and their organizations. AFP established and administers the Certified Treasury Professional and Certified Corporate FP&A Professional credentials, which set standards of excellence in treasury and finance.
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