Half of CFOs say big data is on the balance sheet and has monetary value, but many still don’t know how to leverage that data to benefit the business in specific, measurable ways.
Here are three practical ways your CFO can drive company profitability with data.
1. Better company planning and forecasting.
CFOs need to know the external industry environment to prepare their companies financially. Big data coupled with predictive analytics can help you spot and respond to industry trends that are normally difficult to anticipate.
To take advantage of inflowing information, you can choose a method to gather and analyze data for your company planning. Methods include manual forecasting with spreadsheets, creating a customized on-premise analytics solution or using a cloud-based application from a trusted vendor.
After choosing an analytics method you are prepared to harness data and incorporate it into the long-term financial plan.
2. More strategic financial management.
There is a tremendous amount of financial information across departments, but what do those numbers mean in the broader context of the company? As CFO you want sales volume per capita, revenues, expenses, inventory levels and any other financial data in real time. Not just in real time, but in context. Effective financial strategy comes from looking at the numbers and gleaning actionable insights that potentially lead to higher margins.
To glean those insights, you can leverage the power of data visualization tools like Domo. Real time data visualization gives you deeper insights into your company financials. Don’t just see that profits are increasing—know where the increases are coming from. Don’t just see a spike in expenses—see the big picture and realize what is directly causing the increased costs. Develop a more informed financial strategy to boost profits and minimize potential losses.
3. Enhanced statutory reporting.
Manual reporting can be a monumental task. Often it means days of sifting through reports and compiling disparate data sets into spreadsheets. By the time information has been compiled, it is already outdated. Fortunately, real-time data is the solution to your statutory reporting woes.
Real-time data, partnered with a business intelligence tool, reduces risk of entry errors and decreases the time needed to submit reports. Typically the information you need for statutory reporting is already in your company systems—it is just difficult to access and compile. Increasingly, statutory reporting requires data outside of the company in addition to internal data. Business intelligence technology makes integrating internal and external data easier and more cost-effective.
Today’s CFO is expected to deliver more than ever before, and thanks to data, CFOs can rise to the occasion and deliver the business value companies are looking for.