On one occasion, I heard Satya Nadella (CEO of Microsoft) mention that: “In today’s world, all companies are, in one way or another, software companies.”

The heightened digital transformation in recent years, driven by the emergence of new technologies and programming languages that make computational power more accessible to business analysts, seems to have no bounds.

All areas of business, including FP&A, are impacted by this new reality, which has deepened further in the wake of the pandemic.

Key decision-makers in companies are increasingly reliant on technology, offloading low-value tasks to programs and algorithms. This statement might sound commonplace, but most organizations are still navigating the path of digitization and grappling with the typical issues of relying on spreadsheets:

• Significant manual work to load and update data,
• Frequent back-and-forth file exchanges between departments to update scenarios and forecasts,
• Lack of dynamic dashboards and reports,
• Shortage of tools that support the process.

Once this journey is completed, the time allocation equation will be rebalanced. Numerous platforms and systems exist to support companies in this transformation. The decision of which platform to adopt requires a thorough and composed analysis to consider the various relevant aspects of this determination.

What Should We Consider When Choosing the Right Tool for Our FP&A Process?

Letting go of spreadsheets and embracing a decision-making system is not a simple choice, but it is a necessary one. Digital transformation is a reality, and as key individuals in our organizations, we must seriously consider this resolution.

What are the main attributes we should evaluate when deciding on a tool to adopt?  Certainly, this is a challenging question to answer in a few words, but I will endeavor to synthesize these attributes into a few key points:

• Flexibility for customization: The tool should be able to incorporate all business rules. Even though financial projections might seem similar, each enterprise has specific nuances that need to be integrated into the system. The chosen tool should be flexible enough to accommodate these particularities.
• Centralization of assumptions: One of the main issues with using spreadsheets is that each participating department adopts their own macroeconomic assumptions. The tool we choose should ensure uniformity of assumptions.
• Ease to create analysis dashboards: Users should have the ability to create their own visualizations and analyses quickly and easily. Standard dashboards shared across the company should be complemented with customized analyses that deepen understanding.
• Rapid scenario creation: In critical decision-making moments, it’s essential that the tool allows for the creation and comparison of various scenarios.
• Possibility of integration with other systems: FP&A requires information from various sources to make decisions and manage controls. The tool we adopt should allow for automatic integration with other complementary systems, eliminating the need for manual information transfer.
• Guiding FP&A processes: Finally, the chosen tool should facilitate and organize FP&A processes. Gathering information and reviewing results within a single platform accelerates these processes and reduces common errors associated with spreadsheet use.
  There are numerous platforms and systems that support companies in this transformation.

The decision about which platform to choose requires a thorough and careful analysis to consider the various relevant aspects of this decision.