Today’s CFOs have an eye on more than just the bottom line. They are watching the horizon, predicting what’s coming, and charting the course ahead.
As your organization’s finance leader, the opportunity to better understand the landscape and your business has never been greater. Advances in analytics—powered by digital technologies such as automation and machine learning—give finance teams deeper business insights, and the ability to identify performance issues, predict scenarios, and change outcomes.
It also means finance teams no longer have to look back in time for answers. Advanced analytics can help them look forward and better forecast the future with predictions such as what products and customers are most profitable, or which customers are more likely to pay their invoices on time.
At the same time, technology enables the automation of more financial processes, from accounting to auditing, freeing up finance teams to focus more on analysis and partnering with the business.
Most CFOs recognize the critical need for greater analytics. According to IBM’s “Elevate Your Enterprise, Chief Financial Officer” study, CFOs cite analytics as a key source for the discovery of new growth opportunities, supported by the integration of enterprise data with external market and competitor data.
But despite the value, finance teams remain challenged with putting data and analytics into use. In Workday’s “Finance Redefined: Workday Global Finance Leader Survey,” results showed that only 35 percent of respondents are making extensive use of advanced analytics in key areas such as planning, budgeting, and forecasting.
What are the difficulties? The reasons cited by finance leaders are often the same—disconnected systems and data, too much time spent on transactional work, issues with business partnerships, and a lack of talent. At a recent industry event, Matt Schwenderman, principal at Deloitte Consulting LLP, highlighted two key issues finance faces when it comes analytics: technology and talent. “Analytics is a key way that finance supports a more digital operating model, but we don’t necessarily have the technologies and the talent aligned with that,” he says.
CFOs realize they must begin addressing these challenges now. Without the use of analytics, companies run the risk of making the wrong decisions, ultimately stalling growth and impacting performance.
In this two-part blog series, we will look at three key areas (based on various research studies and interviews with finance leaders) that are critical for advancing analytics in the finance function: a core technology foundation, strategic business partnerships, and leadership.