It’s one thing to read the cheat sheet for Gartner’s “Magic Quadrant for Cloud Financial Planning and Analysis Solutions” report; it’s another to fully grasp the technologies to which it is referring. How else are you supposed to define which business intelligence or financial planning and analysis tool is right for you? We’ve analyzed the report’s findings to break down the terms that you need to know.
Artificial Intelligence
According to Gartner, “By 2020, embedded AI will become a key differentiating factor in finance systems evaluations.” With the advent of digitization comes more automation in the form of sales channels and connected assets that translate into high-quality, real-time data. In operational modeling purposes, AI leads to FP&A accuracy. One hindrance of deploying a system using AI is the need for expertise, either on site or off, which can be a significant investment. When implementing machine learning, “there needs to be much higher levels of data volume, velocity and variety than what most FP&A teams and their platforms currently manage,” the report states, adding, “AI capabilities are not yet consumable for business users within FP&A applications.” The future is bright for AI, however, with the promise of sophisticated prescriptive capabilities.
Robotic Process Automation
The lines between AI and robotic process automation often blur, but according to Gartner, “RPA tools offer potential ways to automate all or some stages of manual, rule-based processes that were previously not automate.” Specialized RPA solutions can be used to automate simple tasks or a fixed set of processes, but unlike AI, it cannot learn or be trained. “Opportunities exist for FP&A vendors to embed additional automation capabilities within their FP&A solutions, for tasks such as data movement and other process workflows,” the report states. “RPA tools can, however, work across multiple applications, so embedded RPA opportunities are more limited than those available to best-of-breed RPA solutions.” The report notes that organizations will look more toward RPA as soon as 2021.
Blockchain
“Blockchain offers a radical new computing paradigm that promises to deliver new decentralized operating and market structure models, challenging conventional processes across industries and society,” Gartner reports. Simply put, blockchain technology allows both humans and nonhumans to exchange information, such as commercial transactions, across platforms without requiring them to use the same application. While only the large FP&A vendors have made blockchain investments, predictions indicate that enterprise resource planning vendors will enhance their blockchain-inspired offerings by 2020. For now, organizations should match their prioritization of the technology with current and potential FP&A vendors, as well as identify realistic use cases and learn how to support the adoption.