Gartner: Finance analytics to motivate decision making
Analytic-driven decision making has become a vital tool for organisations, especially during the global pandemic, but the question now being asked is which business decisions should your financial planning and analysis (FP&A) team support?
According to a new report from Gartner , analytic-driven decision making across businesses have increased but finance analytics should now take centre stage and start to inform this process.
“Leading organisations embrace a business-centric approach to finance analytics. To enable growth, generate finance analytics that significantly improve decision making,” comment Gartner whose statistics reveal there has been a 50% rise on analytic spending in the past three years.
However, only in every four decision makers do not use financial analysis as part of the decision-making process. Gartner are now calling to shift finance analytics from “passive standardised reporting to more engaging”.
“As more departments build analytic capabilities, finance analytics governance becomes unclear,” comment Gartner in the report, Finance Analytics, Deliver finance analytics that inform planning and decision making .
According to Gartner FP&A executives are now asking: What role should finance analytics play in this crowded analytics field and how can FP&A teams support these analytics?
“Finance analytics reporting and support account for almost one-third of finance function spend. But these investments are failing us: Finance data is not suited to modern decision making and managers lack the knowledge to use it correctly,” comment Gartner.
“Misuse of finance analytics can cost organisations as much as 1% of revenue per decision, adding up to dramatic business impact over time.”
Recapture the value of finance analytics
In a bid to recapture the value of finance analytics organisations should focus on their finance transformation, points out Gartner. “Business managers and finance staff should collaboratively define, develop and apply finance analytics.
“Decision teams with clear data governance roles and responsibilities can brainstorm problem economics, co-create more intuitive reporting formats and push one another’s thinking.”
How to act on finance analytics
Gartner recommend organisations shift finance analytics from passive, standardised reporting to more engaging, relevant guidance that encourages dialogue and discussion by:
- Basing finance analytics on scenario analysis
- Building more commentary and opinion into finance analytics reports
- Making finance analytics reports more accessible
“Progressive organisations are reorienting roles for joint finance analytics decision making. To start, focus on business decisions first and finance analytics last. Then improve finance analytics problem-solving processes by anticipating and planning for failure early,” comments Gartner.
Gartner’s new report What’s In, What’s Out: Define the Scope of FP&A Support reveals the results from a recent survey looking at what should (and shouldn’t) be supported by financial planning.
Outlined what key business decisions should be supported by FP&A but are often excluded include these top five:
- Business case evaluations
- Capital allocation (day-to-day spend and Return on Investment)
- Compensation (bonus/incentive)
- Customer analytics
- Distribution channel analytics
According to Gartner these requested are not supported due to the following top three reasons:
- Business leaders have concerns/trust issues when it comes to sharing confidential information with FP&A
- Business leaders like control and are afraid or not ready to be challenged by FP&A
- Decentralised structures and greater autonomy in the business
When it comes to a focus on why FP&A’s support the wrong requests, Gartner says this is due to a “lack of knowledge about which analytics teams across the organisation have the expertise to support various requests”.
Microsoft: Building a secure foundation to drive NASCAR
Microsoft is a key partner of The National Association for Stock Car Auto Racing (NASCAR) and together they are driving ahead to create an inclusive and immersive new fan experience (FX).
These long-term partners have not only navigated the challenges posed by the COVID-19 pandemic with the use of Microsoft Teams and Microsoft 365, but are now looking to a future packed with virtual events to enhance the FX, well beyond NASCAR’S famous Daytona racetrack.
“Together, we've created a secure environment that's allowed for collaboration, but the future is all about the fans”, said Melinda Cook, General Manager for Microsoft South USA Commercial Business, who cited a culture of transparency, passion, adaptiveness, and a growth mindset as to why this alignment is so successful.”
“We've partnered to create a fluid, immersive experience for the users that is supported by a secure foundation with Microsoft in the background. We are focused on empowering and enabling customers and businesses, like NASCAR, to reach their full potential. We do this with our cloud platform which provides data insights and security.”
“Our cloud environment allows NASCAR to move forward with their digital transformation journey while we are in the background,” said Cook who highlights that Microsoft is helping NASCAR
- Empower employees productivity and collaboration
- Improve fan engagement and experience
- Improve environment security and IT productivity
- Improve racing operations
Microsoft Teams, which is part of the Microsoft 365 suite, enabled employees to work remotely, while staying productive, during the pandemic. “This allowed people to provide the same level of productivity with the use of video conference and instant messaging to collaborate on documents. Increased automation also allows the pit crews, IT, and the business to focus on safety, racing operations, and on the fan experience,” said Cook.
“We have started to innovate to create a more inclusive fanbase, this includes using Xbox to give people the experience of being a virtual racer or even leveraging some of the tools in Microsoft Teams to have a virtual ride along experience.”
“These environments are how we create a more inclusive and immersive experience for the fans. We're working on a virtual fan wall which allows people from new locations to participate in these events,” said Cook, who pointed out Microsoft was also helping bring legacy experiences alive from NASCAR’s archives.
“At Microsoft we can take it one level further by letting fans know what it's like to see the pit crew experience, the data and all the behind-the-scenes action. We will continue to improve automation with machine learning and artificial intelligence, from marketing to IT operations to finance to racing operations,” said Cook.
Christine Stoffel-Moffett, Vice President of Enterprise Technology at NASCAR, said: “Microsoft is one of our key partners. They have been instrumental in helping the NASCAR enterprise technology team re-architect our Microsoft systems to ensure an advanced level of security across our environment, contribute to our business outcomes, and focus on fan experience.”