Date posted: 17/11/2022

Finance functions must embrace data driven, agile, future focused planning cycles.

Real-time analysis, and data beyond the financial, holds the key to navigating volatility and transitioning to a more sustainable future

In brief

  • A new report finds that planning and performance models should be data-driven, agile and use real-time data
  • The process should be forward looking and integrate sustainability and non-financial disclosures
  • 82% say that stakeholders need more than financial performance measures

The Planning and Performance Paradigm paper examines the benefits of a more agile, forward focused planning and performance process, driven by data to incorporate scenario planning and integrated forecasts.

Global research into the evolving role of finance functions finds real-time analysis, and data beyond the financial, holds the key to navigating volatility and transitioning to a more sustainable future. 

The new report, the Planning and Performance Management Paradigm, produced jointly with ACCA in association with PwC, asked over 3,000 finance professionals around the world for their views on the future of the finance function. Overall respondents reported too much focus on past financial performance and limited insight to the other data needed for ESG purposes. 

Only 16% of respondents said ESG forecasting was ‘fully integrated’ in their financial planning and performance process, while 82% said stakeholders needed new performance measures beyond the financial. Just over half (56%) of respondents said they currently give ‘equal’ focus to financial and non-financial areas, such as operational objectives.

The report was launched at the World Congress of Accountants in Mumbai at an expert panel session which included IFAC Board member Tarryn Rulton FCA.  

The report recommends planning and performance models should be data-driven, agile and use real-time data where possible. The process should be forward looking, with scenario planning and integrated forecasts. 

Data and technology are key to achieving this and, where feasible, should be integrated in the organisation’s Cloud-based application architecture. This is currently a potential stumbling block, with the research finding this to be ‘disjointed’ and organisations still relying on spreadsheets and not harnessing new technology efficiently.

Chief Finance Officers can lead this value-driven, rather than financial-driven agenda, making the case for change and embedding a collaborative culture that supports innovation and the potential for rapidly changing business models and objectives. The report found that while annual plans give a point in time, organisations need to be agile and responsive in volatile times and stakeholders will need frequent and quickly produced forecasts.”

For more insights into how finance teams can drive value through collaboration, digital innovation and data analytics download the full report below.

Guide to Non-Financial Risks

This guide provides members with a starting point to understanding and addressing non-financial risks and covers the five broad areas of governance, strategy and risk management, disclosure and reporting and assurance.

Download the guide

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