As the world changes, how will data help you change with it?
By Eugene Hillery, senior director, international operations, Tableau
By Eugene Hillery, senior director, international operations, Tableau
With the pandemic having changed the world so quickly, many finance teams have had to reassess their reliance on excel for data analysis. Almost overnight, they needed a better approach that delivered agility, speed, and flexibility to provide accurate insights so their business could navigate the pandemic. Around the world, the pandemic has turned our ways of working on their head, and for finance teams it’s a chance to challenge the status quo.
Amidst the global pandemic, having more hours in the day has never been more critical. However, leading finance functions continue to spend a staggering three quarters of their time analysing data, according to a study by PWC.
Excel spreadsheets are not only mundane and unproductive, but also old-fashioned. The latest data software available is intuitive, collaborative and visually stimulating. ‘Visual analytics’ is intended to speed up the analysis process and empower knowledge workers to draw valuable insights from the information.
Navigating spreadsheets should be a thing of the past. The focus of finance teams should instead be delivering insights from the data which can help organisations during the pandemic and prepare for future strategy. But, research from Sage reveals that 64 percent of CFOs don’t have the ability to make data-driven decisions for them to steer their organisation in the right direction.
If your organisation is considering an analytics overhaul, here are five reasons to make it happen:
While spreadsheets have their uses, their functionality falls short when it comes to providing real-time collaboration. Unpredictable version control, pointless duplication and controlled access to different servers are a hindrance to finance teams. When multiple users access one workbook, inevitably you end up with several sources of ‘truth’. To ensure the data is correct and up to date it can take hours to comb through and verify the information.
When data is time-sensitive, the longer this process takes the less value you can derive from it. As we find ourselves in a period of substantial change, leaders need access to the most up-to-date, reliable information to inform their decision making.
The latest analytics tools provide finance teams with a means of bringing together assorted data sets from across the business to establish a single source of truth that everyone can work from. This provides a much broader overview of the group’s financial health and saves time, particularly when each person can simultaneously collaborate on the same data.
If we have learnt anything about collaborative working this year, the ability to connect remotely to colleagues is critical to running a business, particularly on an international scale. In terms of using accurate, up-to-date data, having a rolling global handover is invaluable.
Take staff performance or daily sales as an example, data that has been collected in London can be picked up by a team in the US when they come online who can immediately turn that data into
insights. Problems can be solved much quicker as suggestions for next steps land on desks at the beginning of the next day in London. For teams operating across different time zones quick answers are important, but they must not sacrifice accuracy just so they can see what’s going on in a hurry.
By unifying diverse data sources into a single interactive dashboard, reviewing can be carried out by anyone, anywhere.
Another endless task bestowed on finance teams is managing business expenses. With many industries’ profits currently under threat, all departments will be under pressure to cut spending. This is where data analytics software can reveal those ellusive correlations that can be the key to establishing novel ways to keep costs to a minimum. For example, dashboards can quickly show the members of staff who conscientiously book travel well ahead of time (which tends to be lower in price) and the individuals who leave it to the last minute, incurring a larger bill.
If a business challenge needs a timely response, quickly being able to view data outliers is also incredibly valuable. Rather than asking ‘what’ is going on, discussions focus on ‘why’ it is occurring. Uncovering cost drivers and making predictions about cash flow is made simpler by data analytics. It enables finance teams to pinpoint the cause of the problem earlier and can inform a potential resolution, even in times of change.
To offer reliable predictions for a company’s future, access to its accounting history is imperative. This is why the finance team plays a fundamental role in organisational planning. Generally speaking, if the data that informs forecasting is richer and more diverse, the more precise and valuable the advice can be.
With rumours of a second wave of the coronavirus on the horizon, organisations that invest in better data analytics for their finance teams will be on the front foot should it occur. If the country is forced into lockdown once more, they will have to analyse comprehensive historical data from the first wave to advise on how businesses should respond and act a second time around.
To help management understand the company’s collective outlook, finance teams can use data analytics to present a cash flow summary dashboard. They can query important information such as, “what are our balances by currency, subsidiary, country – and how has that been impacted by recent events?”. The ability to answer these questions underpins a range of financial processes including SOX compliance and preparing for audits.
Teams can also use data analytics software to more easily compile and comprehend far bigger data sets as a result of effective data analysis and artificial intelligence. This means finance teams are taking increasingly strategic roles in the boardroom. In the past, where finance teams’ insights were mainly used to inform staff or customers, they now work alongside CEOs, boards, and investors to advise on business planning and assist with guiding their organisations forward.
In addition, visual analytics aids in comparisons between internal sources like sales figures and external data sources like economic trends or pandemic datasets. This is particularly useful now whilst trying to understand impacts of the pandemic on organisations. With these deeper insights, it is possible for leadership teams to quickly modify their plans even during times of unprecedented volatility.
The rapid pace of digital and economic transformation is best understood by finance teams. Don’t forget, they sign off every major IT investment made by an organisation. It is surprising then, that finance teams are often overlooked for technology investments which could in fact create efficiencies that drive businesses forward. Compared to other departments, finance departments have the most to gain from the ongoing evolution in data analysis. And when times are tough, these teams are the most critical for the business ultimately surviving. The volume of finance departments deploying advanced analytics is expected to double within the next three years, according to Gartner research. If finance teams can move away from their spreadsheets for a moment, they could see the benefits of visual and AI-empowered analytics and how it can help them add more value to their businesses.
The need to embrace a digital transformation has never been more linked to business success worldwide. Data is being used by every sector, at every level, to move countries and economies forward. Citizen behaviours, consumer trends, environmental change – everything is generating valuable data. Finance teams need to be in a position to harness it and use it to return their businesses to work and steer them into a new future. Those that understand and invest in this will be the ones who come through these challenging times with stronger strategies for growth rather than just survival