Australian businesses are increasingly turning to data analysis to keep them on track.
It's because they're faced with an ongoing period of social and economic uncertainty due to the COVID-19 pandemic.
In these volatile times businesses can no longer simply rely on past performance to predict future trends, so more resources are being allocated to data analytics activities. Organisations with foresight are also leveraging technology to drive automated scenario modelling to generate better predictive analysis. This is helping organisations with the vital tasks of forecasting and planning, especially when it comes to finance functions.
Such activities are important as they ensure an organisation is as ready as possible for what might lie ahead. Being able to quickly adjust budgetary allocations when conditions change can make the difference between flourishing and floundering.
This was particularly evident during the early phases of the viral pandemic. Organisations that were able to quickly allocate spending to adapt to the challenges of remote working and online transactions have performed significantly better than others that were slow to react.
Stages of Transformation
There are three key stages that need to be undertaken when adopting a forward-looking approach to financial functions. These are:
1. Improve performance:
The first step is to identify which business processes are currently underperforming, as well as collating clear insight into what would be required to turn them around. Armed with this information Finance Leaders can prioritise resources towards the high impact and maximum value processes. There needs to be methods put in place that ensure finance data can be transformed into actionable insights that will support this business decision-making process.
As well as internal data, there may be opportunities to also make use of data from external sources. This could be data about changes in the competitive landscape or details of changing market conditions. Augmented with internal data, this will ensure that decisions can be based on the clearest picture possible.
2. Improve processes:
Once the business processes that need to be changed have been identified, the next step is to improve the way they are functioning. There could be opportunities for some manual tasks to be automated, freeing up finance department staff to focus their time on more value-adding work.
New technology may need to be deployed to support these efforts. Take the time to examine the range of options on the market and select those that are most appropriate for your organisation’s requirements.
With new technology in place, there may be more opportunity to offer real-time views of what is happening in the business. Rather than needing to wait for reports, senior executives can view exactly what is happening at all times from anywhere.
3. Inform your people:
As a third step, ensure staff at every level within the organisation are aware of the guiding objectives and understand their role in making them a reality. If staff know the benefits that will flow from forward planning, they are more likely to be supportive of the changes needed to make it a reality.
Conduct regular progress updates during which staff can be brought up to date with the latest progress and have an opportunity to ask questions or make suggestions about further changes.
An ongoing challenge
It’s important to remember that any strategy to embrace a more informed financial planning process is not a set-and-forget activity. With operating conditions continuing to change, it’s important to review core processes to ensure they are operating as efficiently as possible and delivering maximum business value.
It’s clear that the fallout from the ongoing COVID-19 pandemic will continue to be felt by organisations for many months and years to come. Many staff will continue to work from home and everything from supply chains to customer service channels will need to constantly evolve.
Those organisations that are able to rethink their finance functions and use data to support informed decision-making will be best placed to thrive regardless of what new challenges might lie ahead.