As our society becomes more digital and data compilation is becoming close to free, it is becoming more and more clear to our team on which organizations will survive and which ones will be shrinking and dying in the years ahead. While companies are still using excel to do some basic analysis, what is quite surprising is that alot of finance and accounting professionals are still not aware of or have not leveraged the power of data management and mining technologies for their company. In fact, a lot of them risk being marginalized by the rise of the data scientist and being overtaken and put out of business by their competitors.
At a recent course we taught on variance analysis, of the 32 attendees from a wide range of organizations, only one was implementing an automated variance analysis and decision support system to capture and provide data from multiple points in their processes to help their business make better decisions. A vast majority of the attendees were still conducting variance analysis in excel, only on their income statement and some of them 15 to 20 days after the month end.
Of all the clients we work with, we are now seeing some of them becoming poised to take advantage of the opportunities in today’s marketplace and monetize those opportunities due to their investments in following systems:
- Automated accounting processes (purchase to pay, order to cash, reconciliations) that leverage the network effect while reducing transaction costs to less than $1 per
- Centralized data repositories of both financial, performance and market data that allow 360, 3-d views of the business and the markets they are operating in.
- Automated variance analysis systems (performance and descriptive analytics) that immediately tells all levels of the business what areas are out of compliance and possible causes.
- Predictive analytic models that allow them to determine the success of various initatives and provide a rigor to allow them to drive innovation and inspiration for business growth and development.
What is truly amazing is that the above solutions are now available at a price point every business can afford. Technology now available today can now help all levels in the organization make the right decision at the right time and deliver the information to the people that most need the information. No longer do they have to rely on ‘feelings’ or emailed reports. Business and people today can leverage technology now that can accurately show the key influencers for their business as well as accurately predict the future. (if you want simple proof, google nate silver and his work on predicting the outcome of the US election.)
There is still time for finance and accounting professionals to become their organization’s ‘data scientist and trusted advisor’ to drive performance and leverage the power of data. However, they will have to move outside their comfort zone of just using excel and start using the technologies for analytics and decision support.
Interested in what those technologies are and what is decision support? Contact us for more details.