In today’s corporate environment, data analytics has quickly completed the transformation from a “luxury” investment into a crucial component of daily decision-making. Now, more than ever before, CFOs and other high-level executives are anchoring their short and long-term strategies in troves of relevant data points which provide both historical perspective as well as insight into future activity. The merits of a “data-driven” approach can easily be seen in the results obtained by companies utilizing these tools: according to a 2014 IBM Institute for Business Value Survey, nearly 69% of business owners engaging in high-activity analytics research report significant gains in designated outcomes.
From the perspective of a 21st century CFO, it’s easy to see why instant access to a nearly limitless trove of relevant corporate data can dramatically improve the financial health of their enterprise. That being said, methods for practical implementation of this data still prove to be elusive for many professionals who are just beginning to embrace the data-driven analytics tools offered today. With this in mind, here are three proven methods by which CFOs can utilize and benefit from today’s industry-standard analytics applications.
Benefit #1: Mastering Cash Flow
One of the most fundamental tasks of any CFO is to ensure that both incoming and outgoing cash flow remains highly regulated. Through the use of data analytics, daily updates to revenue and expense reports can be parsed, visualized and disseminated to executive leadership. Whether it’s planning for new capital expenditures or optimizing the current payroll, analytics provides CFO’s the tools they need to remain fully cognizant of the highly nuanced web of financial activity taking place within their company on a daily basis.
Benefit #2: Preparing for the Future
Although it is no secret that the dynamics of the global economy are evolving at rates faster than anyone could have predicted, this does not mean to imply that historical activity no longer holds value. In fact, data analytics provides CFOs with the ability to “escape” from the traditional spreadsheet paradigm and compare various facets of past financial data in ways that would have previously been too time-intensive to pursue. With this unprecedented level of access, CFOs can develop even more effective plans for future growth and development, which are informed by similar economic parameters from the past. Essentially, data analytics allows CFOs to rapidly transform years of previous financial activity into viable action steps for the future.
Benefit #3: Increasing Efficiency
Before the era of big data and the development of easy-to-use data analytics software for CFOs and other executives, corporate leadership would often be required to engage in lengthy interactions with IT teams and spreadsheet developers in order to gain access to a well-organized compilation of their current financial health. Unfortunately, by the time the data arrived in the hands of those who were equipped to use it, the information that could have been extrapolated from the numbers was no longer current. Data analytics has revolutionized the process by which raw information can be translated into comprehensive reports, helping to ensure that CFOs can augment their efficiency and reduce the lag time between information gathering and strategic deployment.
Looking to the Future
With this information in mind, it becomes evident just how many powerful opportunities await those who are ready to embrace the data analytics revolution. Not only will this information provide a limitless array of research opportunities for CFOs, but it will also take the “guesswork” out of future planning. Ultimately, the surge of interest in data analytics around the world is a trend that responsible CFOs cannot afford to cast aside!