Michael Huzinec, Director of Business Analytics at Baker Tilly, and Alex Ortiz, Director of Product Marketing at Host Analytics, teach organizations how to stay on top of and improve company performance using business analytics. This Proformative webinar is called “The Evolving Role of Business Analytics for Finance and Operations.” It was held on June 12, 2012.
Success from a CFO Perspective
CFOs look at finance organizations from a different perspective. Oftentimes, they use 3 pillars to measure a company’s success. These are accountability, scalability, and better decision-making.
In terms of accountability, CFOs want to ensure that each division of the company is taking ownership for their area. In a decentralized business model, managers are involved in setting and meeting budgets, which is necessary if they are to be held accountable for their departments.
They also look at the organization to figure out how it can grow in a scalable way from a systems and people point of view. Obviously, organizations want to grow in a way that increases revenues but doesn’t unnecessarily increase costs.
Last but not least, it’s important to leverage the systems in place to make fact-based decisions. CFOs don’t want to rely on gut decisions. Instead, they want to use analytics and hard numbers to make decisions that are derived from data looking forward. It’s not enough to analyze past numbers without taking into consideration what is changing for the organization and its industry.
Best Practices for Workforce Planning Analytics
Planning workforce analytics can be challenging because different individuals in your organization need different information. For example, finance executives like to get a detailed headcount report by individual. They also want to compare and analyze compensation on different budget scenarios. Finally, they want to drill down to compare details of different accounts.
On the other hand, operational managers want to focus on who they need to hire, not how to calculate a payroll budget. Managers want to know the percentage of payroll of total costs. Finally, they want to use benchmarks to compare their payroll costs with other companies.
8 Steps to Turn Analytics into Reality
In order to turn business analytics into a reality for your finance organization, it’s a good idea to go through the following 8 steps one by one.
1. Define Your Analytics Nirvana
The first step you should take is to define what your end goal is in terms of analytics. Generally, you take a look at the drivers of your business (such as financial or operational metrics), the frequency with which you need to analyze your information (daily, monthly, quarterly), the context of the information, and the format of the data.
2. Locate Data Sources
In order to analyze your information, you need to determine where it’s coming from. It could come from Excel spreadsheets, emails, departmental applications, websites, or transactional systems. It’s important to spend some time in locating all of the data sources in order to have all of the information you need to perform analytics for your company.
3. Integrate Data Sources
The next step is to integrate the data sources. This can be done using a document management system like eFileCabinet. You can use templates to make it easier to understand and review the information you’re collecting. When you integrate the data source, it’s important to include operational data, external data, and finance data for all of your separate branches and departments.
4. Un-Silo Operational Data Stuck in Departmental Apps
Most finance operations utilize different applications in separate departments. But in order to take advantage of business analytics, it’s important to add the information from sales, HR, accounting, marketing, and workforce analytics so it can be viewed as a whole. When companies un-silo the data they collect, it becomes easier to make better decisions.
5. Automate Recurring Processes
Automating recurring processes is important to speed up the process of finalizing the numbers in terms of bookkeeping and taxes. Whether companies bring in external drivers, such as peer benchmarks or exchange rates, it’s important to automate what can be automated.
6. Choose the Best Way to Present the Data
There are different ways to present the data. Dashboards are often the best starting point, but your company may also use ad-hoc reports, management reports, or financial reports. How the data is presented depends on the requirements your company has to meet and whom the data is presented to.
7. Empower Everyone to Make Good Decisions
Finance is often considered to be the bottleneck of an organization. It’s important to make it easier for other employees to get the information they need. Employees should have access to relevant data to help them make better decisions.
8. Set Realistic Analytics and Project Expectations
It’s important to set realistic expectations about your business analytics. Depending on the size of your company, it may take a few weeks to several months until your analytics can go live. Your company has to be prepared to spend time and money on setting up the analytics system, too.