The Future of FP&A with AI

In this episode of The Hackett Group’s “Gen AI Breakthrough Podcast,” Sherri Liao and Kimberly Myers Dennis of The Hackett Group explore how artificial intelligence (AI) is reshaping financial planning and enterprise advisement. From centralized service delivery models to the democratization of data science, the discussion highlights how finance professionals can evolve into strategic partners with advanced skills in critical thinking and digital expertise.

Welcome to The Hackett Group’s “Gen AI Breakthrough Podcast”, where –week after week – we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Sherri Liao, a principal at The Hackett Group® overseeing North American Enterprise Performance Management Advisory Programs. She is joined by Kimberly Myers-Dennis, who leads the European Finance Advisory and Enterprise Performance Management and Business Intelligence (EPMBI) practice. The episode focuses on the future of financial planning and analysis (FP&A) and the impact of AI on enterprise advisement.

The state of FP&A has undergone significant transformation over the past decade, with a shift toward centralized service delivery models and the establishment of Centers of Excellence. Business partnering roles are being redefined, and planning and forecasting functions are becoming more structured. Cloud-based solutions have accelerated the adoption of specialized FP&A tools, even among midsized companies that previously relied on Excel. The conversation highlights the continuous efforts of top-performing organizations to standardize and streamline FP&A processes, ensuring that time is spent on high-value activities. The mantra of “less is more” has historically guided FP&A transformation, emphasizing standardization and rationalization of processes. However, AI-driven advancements challenge this approach by enabling on-demand content generation and automation of manual processes. This shift raises new questions: If AI can generate reports and insights instantly, should FP&A still focus on eliminating inefficiencies, or should it instead leverage AI to enhance productivity and decision-making capabilities?

AI is expected to reshape FP&A through interactive digital business partnering, where stakeholders will seek financial advice from AI-driven platforms rather than human advisors as an initial step. This fundamental shift could be seen as a challenge to traditional finance roles, but it also presents an opportunity to enhance strategic advisory functions. FP&A professionals will need to adapt by learning how to work alongside AI tools to optimize their influence within organizations. Different stakeholders require different advisory approaches – something that future AI systems will need to replicate. Therefore, finance professionals should focus on shaping how AI-driven advisement is integrated into business decision making.

AI and digital transformation will also influence finance operating models, potentially leading to a 40% reduction in traditional finance roles over the next two to three years. Traditionally, finance teams have relied on resource-heavy support models to facilitate decision making. However, AI-driven digital business partners could replace some of these functions, offering real-time insights without the need for human intervention. Instead of scheduling meetings and manually compiling financial insights, AI tools could provide immediate, data-driven recommendations. This shift will enable finance professionals to engage in higher-value strategic discussions rather than spending time on data collection and analysis. The transformation will create opportunities for finance professionals to move into more operational and execution-focused roles, strengthening their collaboration with business leaders.

As AI becomes more integrated into FP&A, organizations must focus on two key areas: data integrity/security and workforce digital readiness. While AI will automate many tasks, it will also empower finance professionals with advanced analytical capabilities, allowing them to become more influential in business decision making. Instead of eliminating roles, AI will redefine them, shifting the focus from manual processes to strategic advisory functions. The conversation concludes with a reiteration that AI-driven transformation in FP&A is a win-win for organizations and finance professionals alike. By embracing AI and digital advancements, finance teams can enhance their effectiveness, focus on higher-value activities and strengthen their role as strategic business partners.

Timestamps:

• 0:12 – Welcome to This Episode, hosted by Sherri Liao

• 1:41 – The Current State of FP&A and Digital Transformation

• 11:32 – The Future of AI-Driven FP&A

• 12:32 – Impact on Finance Operating Models and Workforce

• 14:05 – Preparing for the Future: Key Takeaways

• 16:04 – Closing Thoughts