FROM REPORTING CENTER TO PREDICTIVE POWERHOUSE
This article was written by our partners, Finance Analytics Institute. To learn more about them, visit their website here: Finance Analytics Institute
This is the first of four articles unfolding the Finance journey towards World Class Strategic Partnering. Here we begin to build the framework to transition from today’s rear facing Finance, to tomorrows forward-looking Next Generation Finance.
For many years Finance has had a monopoly on reporting numbers to business leaders, but this monopoly no longer exists. In the digital world, data flows everywhere in the business and Finance needs to collaborate and build relationships to gain access to all that data.
Further, many companies are creating analytics centers that will “compete” with Finance to serve the business. Unless Finance gets into the analytics game, Finance risk being replaced in many of its FP&A functions.
Finance needs to act fast and step up their game. Gaining access to data and turning it into insights and foresight is crucial for, what we call, “Next Generation Finance”.
Here, Finance provides value added analysis that is more than just standard financial information. The most valuable CFO competency today is knowledge of how to transform Finance from operating as a hindsight looking spreadsheet driven accounting/reporting center, to a value-add top line and forward-looking predictive Powerhouse.
Traditional Finance Transformation has had the admirable focus on better and more efficient reporting, building relationships and communicate with executives, and develop a strong business understanding. Competencies like Analysis, Communication, Business Acumen and Teamwork & Collaboration are the skillsets sought.
Next Generation Finance Transformation builds upon these skillsets with the addition to empower Finance to drive value-add analytics. World Class Finance organizations understand how to utilize advanced tools and techniques to bring insight and foresight to business leaders that enables them to take data driven decisions.
The “Evolution of Analytics” depicted in the chart below, visualizes analytics stages and analytical techniques that have been available to Finance spanning 40 years. World Class Finance works across the full spectrum of Value Creation whereas immature organizations only work on the left side of the figure.
Continue reading more on this topic on our partners website: Finance Analytics Institute – FROM AVERAGE TO WORLD CLASS – NEXT GENERATION FINANCE