As a CFO you are likely to have a lot on your plate, and unfortunately the forecasting process is far from what anyone would consider streamlined. Essential data you're relying on can often be significantly delayed, or the traditional spreadsheet platforms you depend on for insights may not have the level of sophistication you require. The good news is that in 2018 you have more resources at your disposal than ever before. But why should you adopt a flexible, self-service platform for forecasting?
1) Traditional data collection is a time vacuum
Financial managers in businesses tend to lose around 18 hours per month manually updating and correcting spreadsheets
A platform that can instantly collate data from disparate departments is a huge drawcard for CFOs. As the means of data collection continue to advance, companies are building up huge repositories of data. Traditionally, much of this has been stored in siloed systems, and gathering it all into one place and format has been prohibitively time consuming – first waiting on reports from individual departments and then manually re-entering data into spreadsheets.
Financial managers in businesses tend to lose around 18 hours per month manually updating and correcting spreadsheets, according to a recent report on spreadsheet use from Ventana Research. While those hours will ultimately lead to accurate forecasts, the time itself does not represent any value to the business. Making use of a platform that automates the process of gathering data does more than save time. Because you can access deeper layers of data, you're freed up to perform multi-dimensional analysis, which in turn leads to better insights, and greater value to the business.
2) You need consolidation of actuals as well as historical data
While gathering data can be a headache, sifting through mountains of it for the right data can be even worse. There are many business intelligence and analytics tools out there that report on actuals, but when it comes to forecasting, actuals need to be compared back to budgets to effectively evaluate performance. This is what leads to informed decisions and accurate business forecasting. Without the ability to compare actuals to planning models, you're almost working blind. This is how mistakes are made.
By integrating an analytics platform that offers a 360-degree view of the whole business, the entire process is streamlined. Rather than relying on multiple incompatible tools and trying to fit them together, you can instead rely on a single tool that ties historical data with actuals in order to aid you in a more accurate financial forecast.
3) There are significant limitations to spreadsheets and data warehouses
Spreadsheets are still very much a useful tool for forecasting, and indeed, all types of data analysis, however they are limited when it comes to enterprise reporting. They weren't designed for extensive analysis or forecasting, and they weren't designed as data repositories either. When used as such, they can become a nightmare to navigate.
Fewer than 30 per cent of businesses built a data warehouse capable of meeting their needs.
Traditionally, data warehouses have been built, often at great cost, to store all the data gathered by formerly siloed departments. While data warehouses can work wonders when optimised through routinely cleaned and conformed data, a report from Gartner stated that fewer than 30 per cent of businesses built a data warehouse capable of meeting their needs.
CFOs need a tool that connects to disparate systems automatically, reducing the huge cost and lengthy build time of a data warehouse. This tool should allow users to work in a single platform with access to all systems, as well as providing storage capabilities to support it.
4) Reliance on IT is never ideal
Even with business intelligence tools in place, many financial managers, and managers in all other areas of an enterprise, must rely on the IT department to produce reports. While IT departments often implement tools to help key personnel compile reports on their own, much of the time these tools are department specific and don't communicate with the rest of the business. In this sense, the solutions don't go far enough to offer a robust platform for CFOs.
Many traditional solutions don't go far enough to offer a robust platform for CFOs.
To combat this, many finance professionals will learn shortcuts and methodology for how to get what they need with the tools available. This doesn't have to be the case. Making the best of a bad situation is not a framework sustainable in the long term. You need business intelligence solutions that meet your needs rather than to try and adjust your needs to align with your existing systems.
There is a much better way to approach the forecasting process and that comes in the form of implementing the right business intelligence solution. AtoBI has partnered with many companies that are leading the way in the business intelligence and analytics space. We can not only help find the best platform for your business and needs, but we can assist in integration and can provide support as you learn how to leverage it to your advantage. If this article has hit close to home, then contact us today to find out how AtoBI can help you.