There is a significant gap between actual control and feeling like one is in control. One provides evidence, while the other delivers supposition.
Businesses that take control of their finances through data analytics can make empowered decisions that guide them toward more revenues. Those who feel in control can experience the same outcome, but it takes more than a bit of luck to get there.
The benefits of data analytics are accessible to businesses of any size with the right tools. Instead of relying on luck, the choices can be based on real-time information and analysis.
By just applying a few modern principles, finance teams can achieve great improvements.
One single source of truth
In order to deliver fact-based analytics, finance teams need to collect data from several sources to build their reports. In all too many organizations, this results in manual processes (where the likeliness of errors grows over time, and so does the trust for high-quality data) that can’t keep up with the demand for quick insights from the business, resulting in frustration and stress, and the risk for errors increases. By applying the principle of “all information at one place” and automating the collection of data from the different source systems, finance teams may deliver the performance of the finance teams will not only be able to provide insights quicker but also free up time to deliver the insights in a more business consumable way – becoming a better partner to the business.
The approach according to the concept Modern Finance
Financial analytics and reporting Finance teams need to deliver accurate answers about business performance and to offer insights on how to improve results – when and wherever the business operates.
Strategy & Forecasting
Assist the business to become better at predictive analytics to identify and evaluate future opportunities – more relevant than ever when business models are highly impacted by the pandemic.
Business Process Automation
Manual work is simply too expensive when it’s possible to delegate to computers and automate to a greater extent. Not only to reduce repetitive tasks, but also to reduce errors and improve quality, speed, and scale.
Risk & Compliance
In a world when markets change faster and faster, we also need to apply technology to automatically identify risky transactions and mitigate risk for compliance breaches.
5 considerations when looking at data analytics as an investment
Here are some additional advantages we recommend finance teams consider when looking at data analytics as an investment.
1. Added Competitiveness
Financial analytics tools provide more flexibility to numerous operations. By adopting cloud-based tools, costs get optimized while more information access occurs. These changes are easily integrated with internal applications to reduce maintenance and hardware costs while helping the executive team track outcomes from any location.
2. Sales Estimate Generation
Every business writes a financial story. Its accuracy is based on how thorough the sales prediction process is through the analytics process. Using visualization tools that make it easier to understand the trends found within the information makes it much easier to make empowered decisions and achieve progress.
3. Cash Flow Optimization
Updated analytics tools make it easier for companies to track their cash flows. Less time gets wasted looking for unpaid accounts or determining the upcoming billing cycle. Several reporting and tracking mechanisms are included in these technologies to help build a foundation for observing how money is moving into or out of the business.
4. Improved Decision Making
Financial analytics tools create data-driven insights that make it easier to make an informed choice. Businesses receive real-time information, instantly accessible to authorized parties to ensure accurate results are available. Making the right decision at the best time makes it easier for a company to generate more revenue each day. Collaboration, consolidation, and visualization become available in one place.
5. Security Enhancement
Finance analytics uses tools that start with encrypted software. Businesses receive multiple defensive mechanisms to prevent or respond to cyberattacks. The data gets secured under multiple protective layers using on-site servers, cloud resources, or a combination of the two. Some tech choices in this area allow multi-factor authentication deployment to reduce the risks associated with the user login screen.
Businesses Don’t Know What They Haven’t Embraced
Change isn’t easy. Those issues happen because old habits die hard. Even today, many finance managers are conditioned to know how they’re doing “right now.” They don’t think about how they got to where they are or what should happen next.
Breaking out of that comfort zone isn’t easy, but it is manageable with the right tools and partner.
We encourage finance teams to start describing what capabilities they need to become a better version of themselves, how this will impact the total finance department, how it will align with the company’s strategy and vision, and how to leverage current megatrends.
Aim for actual control and take one step at a time to reduce the “feelings of control”.
Author:
Fredrik Öholm
Strategic Advisor