CFOs are known to have an analytical mind. Only they have the broad overview and insight across finance, procurement, and all that’s related to managing invoices. Despite this fact, they still choose to spend more on analytics. Ever wondered, why so?
One of the biggest reasons is the uncertainty of being able to accurately forecast earnings. This combined with staggering revenues, reduced margins, and limited availability of credit and cash from other external sources can create a potentially dangerous scenario. In fact a study from the Hackett Group clearly shows that only one in three companies can forecast earnings to within 5% accuracy, and less than half can make the same claim about sales forecasting*. This means that majority of companies are virtually flying blind in this space. Though this problem is by no means a new one, but it's being aggravated by the intensity of current market competitiveness. This is also where the CFO’s need to track their cash position and ensure there is always a balance!
The CFO’s great balancing act
Every CFO, at some point, feels short-sighted for not having an accurate picture of their cash position. This combined with the increasing pressure to deliver value-added services while lowering budgets can impact the cash equilibrium every sales-driven organization needs to maintain. That said, relying on outdated IT software and processes certainly don’t offer them the high value insights they need. What’s their rescue plan?
Leveraging real-time data and in-depth analytics to make more informed decisions!
Tip of the growth iceberg
Accurate information stemming from a “data-driven” approach is what CFOs need to create market differentiation and to identify new revenue streams. By pursuing a data-led approach, they can easily benchmark activity and compare results. Indeed, those who have embraced analytics have only begun to scratch the surface in leveraging the benefits that analytics offers -
- Responsive: The quicker CFO’s can uncover sales insights, the quicker they can respond to market perceptions and make result-oriented decisions. It can help them take actions to improve company performance and potentially save costs.
- Competitive: CFO’s have the power to shape their organizations’ analytics operating models. With agile analytics, they can help their company transform into an insight-powered enterprise that can defend, differentiate, and disrupt the marketplace.
- Bottomline: As organisations eye revenue growth, today’s CFOs need every edge to help their businesses make profitable decisions. Managing financial data and performance metrics can help them go beyond typical finance functions to delivering leadership.
Behold the power of analytics
Talking about travel and expense management systems, a CFO can control spend and resource wastage to a great degree with just some visibility in to key metrics**. Clear view of all incurred expenses and the underlying trend can provide real-time data to drive change and decisions for an organization.
* A Guide to Networked Purchase-to-Pay - A step-by-step approach to achieving true financial agility
** The Analytics Advantage, commissioned by DTTL to better understand the state of analytics readiness