by Avin Jain ( Founder & CEO)
As the role of the finance function continues to become more complex, proactive CFOs are recognizing that obtaining a real-time view of all business operations is no longer “nice to have,” but imperative. Gone are the days of living and dying by the spreadsheet, and waiting for monthly or even yearly figures to make financial projections and operational course-corrections. To act as a strategic business partner within the C-suite, finance needs advanced, robust data and analytics capabilities. In fact, a recent survey by Oxford Economics found that having a strong influence beyond the finance function and improving efficiency with automation were paramount in boosting performance. When using the right tools, finance executives can measure overall performance, shape strategy and look for opportunities to grow.
While the importance of data intelligence is felt, many CFOs and finance teams still hold common misconceptions about what advanced analytics really are. When speaking to our customers and CFOs, there are three misconceptions which seems to be the most prominent:
Most business are sitting on a goldmine of data but are yet to uncover its transformative value. This is because many financial leaders think investing in analytics is too costly. Advanced analytics however, do not have to be expensive. Finance teams just beginning their digital transformation journey have a ton of reliable, inexpensive, and free options available. Modern ERP platforms can connect to freely statistical libraries, so finance executives do not have to “re-invent the wheel”. The best solutions provide the functionality needed to get advanced analytics embedded on raw data levels, which improves accuracy of models used to predict revenue forecasts and profitability of customers/products.
Once implemented, the benefits quickly outweigh the initial costs as advanced technologies can replace timely tasks to optimize time, value and money by standardizing some aspects of financial reporting. Cash forecasting is one such example – leveraging insights to look at trends to identify slow and fast payers, and address and improve receivable management. With less time spent reviewing spreadsheets and more time spent leveraging insights, finance teams can become more cost effective. Also, this is the base for an effective and efficient use of machine learning technologies to drive performance.
For most analytics tools, implementation is typically quite fast, apparently a few weeks in most cases, regardless of the existing IT infrastructure. Once deployed correctly – on a transactional level within ERP and not as a separate data mart on higher levels – the benefits are rapidly evident:
While the back-end technology powering advanced analytics is sophisticated, complexity in use would defeat its purpose. The goal is to put data at CFO’s and Controller’s fingertips and make assessing information easier than ever. Technology companies want to ensure that their customers get the most out of their technological investments, which is why they build dedicated teams responsible for preparing, developing and deploying solutions in close collaboration with the customers’ finance teams. These teams, typically composed of finance experts, technology experts and Data Scientists, help each customer streamline the process of solution deployment and user adoption. They are available to teach executives how to use the new solution and to answer questions as they arise. Deployment teams take the complexity out of the technology to ensure their customers are optimizing its value.
The biggest benefit of advanced analytics is that CFOs no longer have to live and die by the spreadsheet. Truly successful CFOs are embracing their position as a strategic thinker and understanding insights and foresights needed for making high-level decisions cannot be realized without advanced analytics. It’s time that finance leaders move beyond traditional misconceptions. Armed with previously untapped insights, the CFO can provide unmatched strategy and insight to support informed business decisions, and ultimately help sustain and grow the company.
The above-mentioned process is just one way to represent your data and we get this done through our BDB Financial Analytics. For more details and a live demo, contact us email@example.com