Posted by Stephen Hambling on 08/11/17 13:02

Feeling overwhelmed by data? You're not alone. Don't get us wrong, data can be great, but we need the right tools and skills to use it effectively. Financial leaders are finding themselves spending more time juggling data, than rather than harnessing its power for analysis. Don't let information overload you, discover new ways to handle it.

We’d love to tell you that things will improve, but unfortunately It’s likely data will get more challenging. The recent Adaptive Insight’s CFO Indicator report  showed that 59% of CFO’s believe the amount of data they are managing will increase by up to 50% over the next five years.

This  staggering increase in data volumes is a headache and it’s no surprise that 40% of Financial Directors admit to using inaccurate data in their FP&A reports. Not because they don’t care, but because they simply can’t separate the wheat from the chaff.

We know you’re drowning in data, but don’t worry, we have the inflatables to keep you above water.

 

Driving change

Traditional financial planning was all about looking backwards. That’s fine, we learn from the past, but it also means your results are out of date before they even hit the CEO’s desk. In today’s fast-moving markets businesses don’t just need to know where they are going, they need to know if the rest of the route is clear and how to avoid delays. Contrary to this, research shows that just 1% of companies achieve 90% forecast accuracy 30 days out. Something must change, it’s time to put away the maps and activate the sat nav.

The vehicle for change is driver-based planning. This is the tool of choice for strategically-focused FP&A teams and opens a whole new way of working for both finance teams and the wider business. By establishing a set of agreed priorities, creating an efficient system and shared language, organisations can begin to wade through the waves of data creating the Holy Grail, a single source of truth.

Where do you start? Simple really.

  • Focus first on your GL accounts, with an integrated P&L, cashflow and balance sheet
  • Ask what is driving your top line and business expenses?
  • Pick 10 accounts that influence 80-90% of the P&L’s -  Create drivers based on these fist? 
  • let the rest of the accounts become a function of the most important accounts.

 Don’t sweat the small stuff

It can feel daunting at first, but our advice? Don’t sweat the small stuff. Travel expenses and stationary costs for example won’t make or break your budget, but tracking them is a time sink. This is where driver-based planning really comes into its own. Work out a basic cost per head for stationary or average cost per trip and there you have it, your stationary costs expand or contract with your staff numbers and your travel expenses can be estimated based on trips to be taken.

A little bit of planning now will save you time down the line. This isn’t just a theory, we have seen this evolution streamline businesses time and again. It’s not magic, but it is alchemy. Taking time to look at the big picture and take a holistic approach to the business helps develop a common set of agreed numbers, improve working practices that will send ripples across the entire business. At the very least it can take the fight out of finance giving you more time to focus on what’s important…. analytics – insight – action.

 

You will Get there

Creating'what if' scenarios is the mainstay of financial analysis, and the future when it comes to financial forecasting. However capability has been the limiting factor, traditional spreadsheets make thte activity time consuming, tying up resources and suffocating the valuable outcome - analysis 

Imagine your Excel is able to be shared via the cloud, which can connect to data from multiple sources. Imagine formulas visible to all and written in real English, and the ability to drill down from high level to detail.   Most powerful of all imagine there are no limits to the dimensions your can model in. The result is a beautiful, intricate and, above all, accurate forward plan that you can re-imagine at the press of the button.

 

No More road blocks

Armed with the power to plan with information tamed, at your finger tips; the finance team can engage the entire business in the process of setting a course, they’ll have the tools to collaborate and share providing a two way relationship with the wider business.

A joined up, holistic approach, using up to date, easy to access, accurate data will spot the roadblocks before they’ve even coned the road. There'll be no more stuck in traffic, or recovering from a car crash because with the latest finance tool kit you can navigate around it, and arrive cool, un-flustered and on time.

 

Download your copy  of the latest CFO insight and discover if you share the same  thoughts of your peers.

 Download

 


Tags: Adaptive Insights, driver based planning, CFO


Subscribe to Updates

Lists by Topic

see all