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How Finance Can Become An Analytics Powerhouse

How Finance Can Become An Analytics Powerhouse

The Finance function is undergoing a rapid change like everything else in business. To maintain its relevance, not only as a stand-alone function but also as a part of the business it’s time for Finance to power up its analytical capabilities and take over the analysis from the frontline.

First, we must have one set of numbers

The classic issue for Finance has always been whether the numbers that came out of their analysis could be trusted or not. There is not always just one solution, but flat out making mistakes makes it quite embarrassing to present something to business leaders. The reason for the many mistakes has often been that the analysis was quite manual rather than an automatic output from a system. Whenever something is manual and requires human intervention it increases the error ratio. Therefore, Finance has invested heavily over the past years in upgrading systems and automating data output to eliminate manual intervention. At the same time, many systems have been consolidated into one ERP system leading to only one source for the numbers. Finance can, therefore, in general, claim that they now have one set of numbers which are mostly free of errors when presenting to the business.

How Finance should leverage the newly gained confidence

Finance now needs to leverage its newly gained confidence to start consolidating all analytics in the company within the function. The case for this change is clear as it can free up resources in the frontline to work more with the customers than producing internal analytics. One example would be that Finance should create packages for sales people to meet with their customers giving them as much knowledge as needed to close the best deal for the company. There is no need to leave anything to the sales person’s imagination as they have full information about the customer and the potential outcomes of any deal they make. How good a deal they will make of course still depends on the individual sales person, however (s)he can’t claim afterward that (s)he was unaware of the consequences of his or her choices. Similarly, all management information whether it’s classic financials, operational information or sales statistics should be produced in Finance’s new analytical powerhouse. This will emphasize the “one set of numbers” approach as well as minimize confusion around how the company is doing.

How to avoid the politics when Finance gets more power?

It should be recognized that making such a shift is not without challenges. The frontline could end up feeling concerned about how their performance is portrayed to management when they are no longer in control of the analysis or the presentation of the results themselves. However, Finance should understand it is a support function and that its main purpose is to work well together with the frontline, understand their needs as well help them deliver results. Finance can never be successful if the business is not successful!

Let us know what you think about Finance as the analytical powerhouse of the business and what it takes to get there?

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