Stepping into a new year feels like pressing the reset button. It’s an annual window that opens up promises of fresh starts, resolutions for positive life improvements, and an impetus to learn from past mistakes—and leave them there. A new calendar year is also the token time of year that you can expect to see predictions for the 365-day-long road ahead.
Predicting the future—especially amid times of uncertainty—can be hard, but some elite groups have accomplished this coup with eerie levels of accuracy. In fact, my colleague Vivek Soneja recently shared the top four trends of 2018 that supply chain professionals need to keep an eye on. A few weeks ago, I also discussed three ways that finance teams can prepare for the coming year. You can read more about that here.
However, even though a new year brings new opportunities for improvements and insight, many business elements will remain the same. For finance teams, specifically, these are some of last year’s trending topics that will continue to gain steam in 2018.
- Connected cloud technology reigns supreme.
Companies recognize the value of using technology platforms to connect financial and operational plans. Enterprise planning platforms that can link finance and operations with one another have been shown to heighten collaboration, improve data transparency, and bolster productivity by alleviating laborious manual processes.
For finance teams that rely on spreadsheet-laden environments, a natural barrier prevents them from being able to adapt and thrive within volatile business conditions. In 2018, expect to see connected cloud technology and automation receive significant airplay—especially around the benefits of integrated business planning and connected planning approaches in finance.
- Zero-based budgets and rolling forecasts continue to ascend.
Budgeting is a financial exercise that seems as old as time, and it’s not inherently surprising to see it mentioned as an ongoing FP&A practice. However, in recent years, different variations of the practice have driven significant cost savings in the midst of uncertain times—gaining renewed favor within organizations throughout every industry.
Kellogg Co. and Verizon spoke out last year about adopting a zero-based budgeting (ZBB) approach, which can be an effective cost discipline to improve resource planning, staff engagement, and organizational collaboration. The approach, when executed effectively, can translate into cost savings that fund future strategic initiatives and drive growth.
Driver-based rolling forecasts also provide an advantageous approach to budgeting—with some organizations using them to replace the traditional annual budget entirely. This particular practice can help organizations become more adaptive and supported as they focus on steering business performance. Expect to hear even more about both of these approaches and their benefits in 2018.
- For the FP&A talent pool, the need for change remains constant.
Talent management remains front and center as organizations head into the new year—perhaps even more pressingly this year than in the past. Change in financial planning processes and technology is a must for organizations, and the benefits it provides talent management are twofold: Organizations liberate finance teams from collecting and validating data and also use technology as a catalyst for improving analytical maturity.
As the FP&A team transitions from operating as a source of information to operating as a source of trusted business insights, today’s planning technology can help them improve productivity and steer business performance more effectively. Organizations investing in technology and tools that enable better decision-making and value-added business practices will continue to see their talent pools deepen.
And as automation and analytics continue to improve operational efficiencies, expect to see top finance talent migrate toward companies that are embracing, investing in, and deploying these types of process and technology changes.
Do you have a list of existing or new trends that you see impacting the finance function in 2018? If so, I’d love to hear your thoughts for the year ahead. Leave them in the comments below.