The role of the Office of Finance has changed as digital transformation has overtaken modern organizations. The finance team has evolved into a significant business partner position, where leaders look to them to provide key insights into the business, its trajectory and its growth potential.
These teams, however, need the right tools and mature processes to provide the kind of value that an organization is looking for. Recently, research and advisory firm Gartner called out four areas of the financial analytics process that FP&A teams must evaluate if they are to stay current and maintain a position as collaborators in the business’s planning and growth.
Four Key Areas for Financial Analytics
All four of these areas of financial analysis are dependent on the quality and capabilities of the tools that the Office of Finance uses to produce business insights. Financial analysis is complex, requiring robust tools to handle the quantity and diversity of the data needed to go beyond traditional FP&A input to the organization.
Planning and Budgeting
FP&A teams should not have to struggle with their planning and budgeting tools to be able to produce actionable reporting and insights. But if your finance team is still using spreadsheets and manual data entry and reconciliation, you’re not providing as much value to the business as you could be.
Budgeting and planning tools built with intent help finance teams by accessing data from across the organization into a transparent and collaborative tool usable by stakeholders throughout the business. These tools allow for scenario planning, as well, using multiple “what-if” snapshots to guide companies in the right strategic direction.
Integrated Financial Planning
An organization’s financial performance is not independent of other things happening in the business or even the industry or the world. So, it makes sense that when the finance team analyzes data, they should look beyond the borders of FP&A.
Being able to process data from multiple sources and combine that with financial data into meaningful analysis takes modern tools built specifically for data evaluation and reporting. The tools used by the finance team must be able to take in data from multiple sources, evaluate that data, and present it back to the business so strategic planning can take place.
Management and Performance Reporting
The first two categories help finance teams understand the what and the how of a business’s financial performance. Just as important, though, is the why.
For organizations still using spreadsheets, it’s difficult if not impossible to look beyond accounting numbers to understand why certain outcomes have taken place. It isn’t enough, however, to simply integrate the data with finance’s numbers. The FP&A teams must be able to process that data and use it to provide actionable insights to the rest of the organization through reports and dashboards. This requires more advanced tools that offer business intelligence and reporting capabilities.
Forecasting and Modeling
The disruptive and breakneck pace of nearly every industry today means that for companies using brittle and burdensome tools, FP&A will suffer when it comes time to build out financial forecasts. These traditional tools are cumbersome, requiring both time and expertise to create forecasts. On top of that, if any detail changes, financial models can be delayed in reaching the leaders who need to make informed decisions today.
Newer financial tools are more adaptable and agile, allowing for a changing business landscape and rapid adjustments to forecasts. These tools give the finance team the power to produce more timely forecasts and more accurate predictive analytics.
Evaluating your team’s maturity in these four areas will help pinpoint where your tools and processes are in need of an upgrade. With the right tools in place, the office of finance can keep pace with disruptive changes in the industry and help evaluate your positions and guide your business in planning to meet the organization’s goals.
Centage Corporation’s Planning Maestro is a cloud-native planning & analytics platform that delivers year-round financial intelligence. With Planning Maestro, Centage offers the sophisticated features needed by small and mid-market organizations to integrate budgeting, forecasting, and deep data analysis within one easy-to-use, scalable SaaS solution. For more information on how to modernize your office of finance with intelligent planning, view our product demonstration video, or call 800-366-5111.