By Arindam Dutta
Finance & Accounting departments are faced with unprecedented global competition, business and economic uncertainty, and mounting regulatory pressures. They are asked to make decisions faster with an increased number of decision makers in a flattening organization structure. And these decisions need to be based on the large quantities of data available to the organization. Unfortunately, the amount of data is so vast that it is very challenging to access timely.
Data from social media sites, videos, emails, text messages, and mobile transactions contain a wealth of information, and this unstructured data is growing exponentially. Combined with the structured data in databases and spreadsheets, the volume of data flowing into organizations every day is a source of great opportunity. But this “big data” from a variety of sources in various formats and in large quantities can be overwhelming to harness. In a recent cross-industry phone survey 35% of respondents do not feel confident that they are successfully managing information as an asset to facilitate management decision making.
Big data impact on Finance & Accounting
CFOs are faced with a fragmented organizational decision making process and a lack of information visibility. Their finance organizations spend countless hours crunching massive amounts of data, but this investment of time, money and effort is primarily spent on reporting activities. Shrinking staffs and reduced investment in IT have left many finance groups with fewer resources available for analysis.
Finance organizations must adhere to increasingly stringent compliance standards, such as Sarbanes-Oxley and the International Financial Reporting Standards (IFRS). In the same cross-industry phone survey, 64% of respondents said that they face significantly greater expectations on regulatory and compliance requirements.
Better business outcomes from F&A analytics
With the right analytics implementation, an organization will have a "single version of the truth" that will also allow for different perspectives on the same data. For instance, it will reconcile the very different requirements of accounting for sales commissions versus revenue-based billing. And it will support reporting to comply with tax requirements as well as internal financial analysis.
Analytics applied to cash flow and ROI modeling can be used to optimize offerings by segment and to better manage budgets and resource allocation. By better understanding procurement spending, pricing, and the macro-economic environment, companies can reduce supply chain costs, spend more effectively, and better manage diverse business units.
Organizations can improve operations efficiency using sophisticated risk assessment, predictive modeling, and financial research to manage business risks at a transaction, customer, or portfolio level. Other analytic tools -- such as procurement risk analysis, discount-capture analysis, supplier risk assessments, and fraudulent claims modeling – are used to enforce compliance policies, optimize collections, and streamline supply networks.
Forward-thinking organizations leverage analytics to go beyond compliance to improve the effectiveness of marketing spend, better manage product portfolios, spot new growth opportunities, and launch new offerings more quickly and successfully.
Better than a crystal ball
By outsourcing analytic services to a reliable partner, organizations harness a proven, center-of-excellence-based framework for extracting relevant data, gaining a true understanding of the business, and translating that knowledge into actionable business insights. This model of outsourcing helps organizations leverage extended relationships to do more than just rote transactional processing. This frees retained staff to focus on higher-level judgments, strategic decisions, and mission-critical accountability. Leading organizations use this model to reduce costs, discover new opportunities, mitigate risks, and deliver better business outcomes.
For more information, please read the white paper, "From Data to Insight."