Applying effective use of data in the finance industry
Businesses are either overwhelmed by too much data, limited access to their data or being held back by the technology they use to measure their information. The influence of digital technology in finance has been ongoing for years. The capacity to automate manual tasks by applying innovative technologies has enabled the finance industry to transition from applying conventional measures to a more insightful analysis of a business.
While more businesses are applying analytics in some shape or form, recent reports suggest that only 14% of finance-related businesses display success in assessing large amounts of data created by systems to generate valuable insights. Finance teams that have utilised tools to enhance their forecasting, improving model scenarios can explore new insights that enhance decision-making.
Based on responses from senior finance executives worldwide, over 80% of analytics is missing the mark. One of the main reasons for this is that many businesses are not extracting the value and insights from their data.
The survey discovered that its data is holding many businesses back. Findings suggest that only a little over 10% of organisations consider themselves as ‘data proficient’, capable of actively managing their data and equipped with the necessary tools and resources required to deliver the insights and competitive advantage they need.
Ignoring the value of operational data
While many businesses have focused on enhancing their analytics, most are missing the real value of insights. To have a complete overview of the business, data from other systems and processes need integration and alignment with financial data to deliver insights and support decisions that enable a competitive advantage.
Ignoring the Information Systems Strategy
The development of new technologies has enabled many struggling finance-related businesses to maintain pace. While these new technologies may be useful, successful organisations need a more holistic approach towards their strategy, yet many are not focusing on this. Studies indicate that over half of finance-related businesses are not capable of consistently adding new data sources to improve their understanding of their business, and under half can utilise their non-financial data. However, when businesses discuss their most important tools for analytics, most points towards AI and ML and at the bottom of the list are usually the necessary building blocks required for delivering an efficient analytics system.
Focusing on the bigger picture The results of the latest studies are consistent with other experiences across the market. Many medium to large businesses are struggling to reach the efficiency and agility required in their processes. This is usually down to dependence on traditional spreadsheets or fragmented systems that are not adequate for the business.
Innovative businesses continue to improve their analytical insights by unifying their processes to deliver a single version of the truth for their financial results, budgets and forecasts.
Converting trends in data into actionable insights
Business leaders are taking the next step by combining transactional data, processes and systems consistently into their analytics. Accessing this type of confirmation from operational systems and combining it with financial data provides these businesses with real-time views into vital trends that support decision-making that impacts future results. Efficient and unified reporting and planning systems require the necessary analytical infrastructure and the right talent. In today’s rapidly changing global economy, having information systems that generate insightful and actionable analytics is no longer a ‘nice to have’ option but a critical element for the future.