As more and more data flows into organizations from structured and unstructured sources, analytics has moved from “nice to have” to “must have” for better forecasting, as well as to help answer critical business and operational questions.
Such questions include what challenges a firm will face in the future, as well as what services customers will be most interested in, says Lisa Vormittag, CFO of VAI, a provider of enterprise resource planning software, in an AccountingWeb article.
In the past, organizations’ data and analytics have been owned by data scientists and IT departments. Now, however, more CFOs are relying on analytics to create market differentiation and to identify new sources of revenue, she says.
But for analytics to really pay off for companies, CFOs must recognize and take advantage of these three key benefits: real-time data access, visualization, and the ability to analyze massive amounts of data, according to Vormittag.
Some traditional BI (business intelligence) systems don’t analyze current business performance; however, with analytics, CFOs can get a true understanding of what’s happening within their businesses—as it happens, she says.
Having access to data in real time offers CFOs the information to run successful businesses, enabling them to determine ways to save money and giving them better sales insight, Vormittag says.
Additionally, real-time data can pinpoint errors immediately, so companies can quickly react and mitigate the issues. And real-time data lets organizations stay ahead of the competition, because CFOs are notified the instant a direct competitor has changed its strategy or cut its prices, she notes.
“Access to real-time data enables CFOs to make faster and smarter business decisions, improving the organization’s bottom line,” Vormittag says.
It’s crucial for CFOs to be able to access all the companies’ financial information in one fully integrated, easy-to-view dashboard. The reason: the way data is presented affects how well CFOs understand the information. It also affects how quickly and easily they can use the information and insights to make better, more informed business decisions, according to Vormittag.
And having access to a company’s financial information in one dashboard makes it easier for a CFO to share the report with company executives in a way that they can understand. “By visualizing important information in an easily digestible format, CFOs can do their jobs more efficiently, with better controls and predictability,” Vormittag notes.
It’s critical for companies to implement analytics strategies that allow CFOs to turn the huge amounts of data from their ERP systems into immediate, meaningful, and actionable information they can use to make better business decisions, she says.
With the right analytics software, CFOs can analyze current and past trends to accurately forecast the future. Analytics can help CFOs sort through all the unnecessary data to identify what’s most important, e.g., what product is selling best where, and what product is profitable in specific markets, Vormittag notes.
With analytics, CFOs can better determine where the business is strong and where it needs improvement, she says.
“It can provide valuable information to improve opportunities for growth, innovation, and competitive advantage for an organization, Vormittag says. “The analytics era will provide endless business opportunities for organizations that don’t wait too long to realize its potential.”