It’s a trend that’s not going away and smart companies are making big changes in their internal processes to keep up.
In a recent Armanino webinar, John Dunican, Partner, and Bryan Rogers, Senior Manager, with our CFO Advisory Service practice outlined both the challenges and the solutions.
The emergence of big data is one driver. By one estimate, Dunican said, over the next seven years 50 times more data will be produced than ALL of the data available today. That opens great opportunities for analysis but it also spells the end of spreadsheet accounting at the corporate level. If you’re paying CPAs to transfer data onto a spreadsheet, it’s a good sign something is wrong, Dunican said.
Another factor is the rise of mobile computing. When decision making data need to be shared among more than a few executives, the process demands software automation not CPAs with faster typing fingers. Dunican drew an analogy to the early days of the auto when opponents called for faster horses instead of adapting.
Dunican and Rogers pointed to the budgeting cycle as one key process ripe for change. Traditionally, the annual process took months and produced a snapshot that was out of date a few months after it was completed. Rather than focusing efforts on justifying variations, focus on building better real time forecasting systems that can drive decisions, they urged.
One popular step is ditching the annual budget drill in favor of rolling quarterly budgets and forecasts that turn the budget into a living document that can be shared via the cloud.
The switch to automated budgeting and forecasting software is consistent with the findings of Armanino’s CFO Evolution survey which show financial officers eager to reduce the time they spend as accountants and increase the time they spend as executives engaged in strategic planning.
It’s also consistent with surveys showing CFOs looking ahead to merger and acquisition activities put the reliability of business planning and forecasting as their top concern. They want real time access to accurate key performance indicators. And that’s going to mean a shift to automated software.
To watch the webinar, click here.