Despite all the change this year, data has held, if not strengthened its position, as a critical business asset.The businesses with access to up-to-date data arguably coped better with the disruption because managers and CFOs were able to diagnose their specific situation in detail and move fast. As we look ahead and bring you the data and BI trends for 2021, we can't go past the mega-trend in the business intelligence market—the intersection of data analytics and finance. Here's an excerpt from the new Data trends eBook - when BI meets finance.
The power of business intelligence is enabling finance teams to share critical finance indicators more easily. These insights are providing the evidence or impact of operational decisions on the bottom line, so decision-makers can quickly trouble shoot or add more value. Finance is doing things that it never could before thanks to digital technologies.
We outline these notable and exciting advancements in finance as well as provide our tips on how data is impacting other parts of the business. While it has been a challenging year for many, there has been a shift in attitude towards digital transformation and the necessity to have robust data visibility, online revenue-generating channels and virtual workplaces. There is no going back, and the pace of BI and data adoption is accelerating.
Trend one - Integrated budgeting tools & high frequency what-if analysis
The budgeting process becomes seamless and ultimately more accurate. Businesses are operating in increasingly dynamic and volatile environments, and the time to adjust and respond has contracted.
To keep pace with rapidly changing market conditions, we are seeing a shift to integrating budgeting and forecasting with BI to inform the company strategy better.
Businesses are adopting software tools to make the budgeting process simpler and more collaborative, so budgets are more integral to decision-making. The BI software allows the budgets and forecasts to be live — making re-forecasting more straightforward because it’s clear what’s budgeted and what’s achieved for the year-to-date. Many finance teams are also carrying out ‘scenario’ or ‘what-if analysis’.
Trend two - Financial performance at the heart of the organization
Finance data can no longer be siloed from the rest of the business and shared only at month end.
The adoption of BI for financial information is removing barriers for business owners and managers to keep on top of financial performance continually.
Near real-time access to key performance indicators helps people to see the impact of their decisions which both makes them more accountable for the execution of a strategy and quickly demonstrates what works and what doesn’t.
Trend three - Vizualizations for actionable performance insights
Finance teams turn to visualizations to help people make better-informed decisions.
Traditionally, financial reporting is numbers heavy, but as more than 65% of the population are visual learners, it makes sense for finance teams to turn to visualizations to get their point across and help people make better-informed decisions.
One effective way for finance to provide understanding is through highly contextualised, ‘smart’ visualizations. The ability to explain complex concepts, find correlations and causations in data and present compelling stories derived from these helps to elevate the finance team’s role in a business.
Trend four - Automation of financial trends
Traditionally, business intelligence has relied on people to extract insights. Given the structured nature of financial data (revenue/cost of sales/operating expenses etc.), insights can be generated automatically such as the identification of the causes in a drop in profitability and the recommended courses of action to remediate.
The tasks that finance teams can perform are transforming.
The accounting team will move away from transactional accounting and rely on technology for predictive insights into how their markets, competitors and consumers are affecting their overall business performance.
For more information on these data trends and five more BI trends download our free eBook Top BI and data trends for 2021.