Analytics for Finance-Part II of IV-How To

Analytics for Finance-Part II of IV-How To

Welcome to this article that is part of a four-article series for Finance where we explain how to build a culture of analytics, how to build insights and foresight, and sharing of some cases. In combination with the Business Partnering Institute, our aim with the series is to further push the finance function in its on-going transformation towards being a strategist with the business.

Part II of IV: Building an Analytics Culture

Last week we described the end-state of what a culture of analytics should look like where Finance moves through explaining WHAT happened, WHERE it happened, WHY it happened and WHAT MIGHT Happen. However, many people can describe the end goal of something without necessarily paving the road ahead to get there. That’s especially true when we talk about building a new culture in your company. Let’s discuss the elements of a culture of analytic decision making and make it relevant to how Finance should work differently in the future.

Mindset, People, Process and System

In broad terms, the culture of analytics is anchored in the following four elements.

  • Mindset
  • People
  • Processes
  • Systems

These elements in combination are what makes an organization work in an unconsciously competent way. Study each of the parts and you will figure out what it’s like to work in the company. The mindset might be entrepreneurial, as the people are impatient go-doers, processes non-existing, and systems something that’s constantly evolving as the company grows. This would likely be the culture of a start-up. So how does it look for most Finance organizations beyond the start-up?

  • Mindset: Control company operations by commenting on WHAT, WHERE and WHY things happen
  • People: Analytical and data-driven but struggle to communicate well and build relationships
  • Processes: Cumbersome to fit compliance rules and regulations with long budgeting processes to satisfy the controlling mindset
  • Systems: Typically Excel with other outdated and scattered tools as various applications have been built on top of an ERP system

To build an analytics culture you need to work with allparts of the culture to make a sustainable change. If the goal is to make recommendations to change future performance by answering the WHAT MIGHT HAPPEN, here’s how you can work with each element of your Finance function’s culture.

  • Mindset: To change the mindset of your people you need to create a shared vision for the future. They need to understand why it’s important to move from a controlling mindset and what positive outcomes will come of it. You will likely need to make this visible in a framework where it’s very concrete what each person must do differently every day. That will help drive behavioral change which, with reinforcement over time, will create a new mindset in your finance function. You will also need to allot time in people’s day for change. Asking for change but requiring delivery of all the current tasks that consume their bandwidth creates an impossibility of performance to change.
  • People: You need to develop your people. If you want them to do something different they need to learn new skills or improve upon their existing skillset. You don’t want to lose the analytical skills but to make people understand that new systems beyond Excel will do a lot more of the analytical processing in the future. Hence rather than doing compilation it’s a lot more about interpreting the analysis to create insights. We will describe how to do this in a coming article. Also, you need to match skills. A man wedded to spreadsheets will not often adopt a new analytical tool.
  • Processes: Your processes need a complete overhaul to become much more agile. You need to embrace failing fast to succeed sooner. Spending five months on completing your budget or ten working days on your monthly reporting simply doesn’t cut it anymore. It’s likely that you should design new processes from scratch to cater for delivering insights much faster. Ideally you need to make real-time month-end processes a non-issue. In addition, let the system create your forecast to drastically cut down time on budgeting and make room for having the important discussions about business strategy and making choices. In the brave new world of analytical decision making, Data and Decision Governance processes will become a small part of everyone’s job every day.
  • Systems: You cannot make a real change without getting new analytical systems. Spreadsheets will not cut-it sophisticated analytics with large multi-dimensional big data. However, it’s important to understand that these new cloud-based analytical tools are not monstrous ERP projects like the ones you know. That gives you a lot more flexibility and will enable you to go digital at low cost and try out many different applications to learn what works best for you.

We fully understand that changing a culture takes time but, it need not be expensive, long, or hard. What it is, is a step wise incremental approach. Starting small and building credibility and capability can be done in a few months. Each quarter and project will build on the next and over a two year journey, a culture of data driven decisions with analytics will cover all areas of the company. You will face many obstacles on the way but nothing that hasn’t be faced and resolved before.

It’s time to get started now!

Since this will be a journey you better get started now. First, map out your current state along the lines of mindset, people, process and systems. Then create a gap analysis to the desired future state. Finally, create a plan for how to close the gap. This is standard change management so don’t get overwhelmed by the work ahead of you.

What do you find to be most difficult changing the culture of your finance function? Would it be helpful to have a clear framework for how to make the change? We’re happy to help and also bring forward your situation as case study if you would like to contribute to future articles.


This article is a collaboration between the Analytic Intelligence Institute led by Robert J Zwerling and Jesper H Sorensen, and the Business Partnering Institute based in Denmark, led by Michael Bülow and Anders Liu-Lindberg.

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