Research Perspective

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Achieving State-of-the-Art Finance Analytics:

Effective Software and Robust Data Are Keys to Improvement

Modernize Finance Analytics

By itself data isn’t useful for business. It requires analytics to transform data into actionable information. Analytics of one sort or another has long been a core competence of finance departments, applied to balance sheets, income statements or cash flow statements. Today, however, Finance must go beyond these basics by expanding the scope of the data being examined to bring together financial and operational information that can yield actionable insights. For example, data from the systems that manage sales operations, human resources and field service must be available for analysis and to all departments and applications that need it.

By being applied to broad, diverse sets of data, analytics can provide richer performance measures that offer executives and managers deep insights into how well the business is doing and why. But it must give them the ability to look forward, providing more accurate forecasts and early alerts to enable decision-makers to address issues and opportunities sooner and receive better guidance on what to do next.

Despite these imperatives, our benchmark research finds that many organizations find it challenging to go beyond basic financial analysis if they attempt to do so at all. A majority of participants reported that the process they use to create analyses is too slow and not easily changed. And they said that the necessary data is inaccessible or too difficult to integrate. The root causes of these issues usually lie in the realms of technology and data. Many companies don’t use software that enables them to create and apply sophisticated analytics, and many haven’t done enough to ensure they always have all the necessary data readily available for analysis.