Nowadays it’s hard to find a Finance professional who has never heard of Analytics. But many still have difficulties figuring out what exactly it means in the Finance context and how it differs from the analysis most finance teams already perform.
In the first of a series of articles about improving business performance through Analytics, I explore why it signals a new future for the Finance function. Hitch a ride and let’s discover where it can take you!
The new role of Finance is evolving into an insight generator
It’s no longer a secret that in today’s complex marketplace with new business models and ever-changing customer demands, siloed organizations will not succeed. If CFOs and their teams want to stay relevant to the businesses they serve, they cannot afford to remain seated behind closed doors reconciling accounts and producing reports at the end of the month. The new role of Finance goes way beyond this. It is evolving into a business partner that infuses financial acumen into other business functions, and it’s even becoming an insight generator, helping to run the business more effectively on an operational level. How?
As the walls between corporate silos become thinner this creates endless possibilities to utilise data that are flowing, often dispersed, across the organization. Finance teams are the best placed to transform these data flows into insights, because they have a view on and understanding of all the functions driving enterprise performance. To be able to shift direction and fulfil this crucial role, Finance needs high-quality fuel, a powerful engine and the right compass.
Data is your best fuel
On the road to any company’s growth and success, data is your best fuel. Ensuring it is fuel of the highest quality is no easy task. Healing data dysfunction is nonetheless in the hands of CFOs who are becoming data doctors as they shift towards new ways of working and connecting with the business. Don’t limit yourself to traditional financial data here. What was once considered purely operational data is now becoming linked to financial outcomes that provide new insights and opportunities for improving business performance.
Gear up with Analytics to get the maximum out of your data
To avoid burning fuel in vain, an efficient engine is required to generate insights that will move the business forward. This is where Analytics comes into play. It’s not just analysis, but a consistent fact-based approach to decision-making and action taking on a daily basis. Analytics brings together market, operational and financial data to support business discussions. Not only to explain events of the past, but also to anticipate and be ready for the new challenges of tomorrow. Having the right technology is of huge importance, but to yield the most value, you also need the right mindset, leadership and robust governance in place.
Know where you are heading
Having got your fuel in the tank and with your engine running, check your compass and make sure you know where to steer, adjusting your route based on insights generated in real time. Depending on the specific business challenge, industry situation or market parameters, adapt your Analytics strategy so that decision-making is always supported by relevant insights. This means CFOs should equip themselves and their teams with the tools and skills that will allow them to utilize the full potential of advanced analytics techniques and algorithms, data integration, visualization and other Analytics capabilities. In this way, they will be able to drive strategic discussions and provide business insights as opposed to purely data gathering and transaction processing.
In the next episodes, I will explore how Analytics can be applied to improve business performance, and then move on to look at the impact of Analytics on the Finance workforce in more detail.
Meanwhile, feel free to get in touch to discuss how we can support you to turn Analytics into a powerful engine for your organization.