Management consultant Peter Drucker’s phrase “If you cannot measure it, you cannot manage it” may have been coined in the mid-20th Century, but it is more pertinent in today’s data-driven world than ever.
In 2020 finance professionals are faced with a wall of internal operational data and external market information that contains within it the sort of insights that can make or break a business.
Relying on manual processes and human intelligence to unlock the full value held within reams of data, often held in disparate pockets across an organisation, is at best time consuming and in most cases impossible.
Fortunately, the cost and capabilities of cloud-based accountancy software is now at a point where businesses of all sizes can harness enterprise-level functionality such as artificial intelligence (AI) and machine learning to model accurate forecasts and generate strategic board-level insights.
Meeting stakeholder’s great expectations
As an experienced Financial Controller, I have first-hand experience of being weighed down by the expectation that finance functions can facilitate rapid, data-validated strategic decision making across a business.
In many cases it’s simply impossible to achieve this due to the limitations imposed by legacy ERP systems that are only capable of supporting traditional manual record-to-report (R2R) processes with little or no business intelligence tools.
However, a new generation of modern finance software, such as Microsoft Dynamics 365 Finance and its Power BI tools, can support decision making by organising and visualising data in a way that reduces the time taken to track, interpret and report on key financial information.
This can provide FDs, CFOs and finance departments with:
- Immediate access to unified, real-time information to support rapid, informed decision making
- Customised dashboards and reports with interactive visualisation to help you explore the data
- Comprehensive data drill-down capabilities for detailed analysis
- The ability to identify patterns or correlations by overlaying data sets and tracking key metrics over time
Harnessing AI and machine learning
For some organisations gaining visibility and control over the key accounting metrics outlined above is a step change in itself.
However, harnessing AI and machine learning’s capabilities when it comes to monitoring, reporting and forecasting can deliver business intelligence at a whole different level.
This isn’t some far off, hugely expensive tech fairy tale. Cloud computing power has now reached the point where these tools are baked into solutions and can be configured to meet your business’s needs.
These forward-looking business intelligence solutions use algorithms to continuously interrogate data sets and extract insights that complement human judgements.
The practical applications are broad ranging and can include:
- Creating advanced revenue and cost forecasting models that become increasingly accurate over time
- Develop machine learning models that aim to drive greater accuracy in demand forecasts by predicting trends and their potential impact
- Reduce admin around variance analysis by using Bots to automatically log-into applications, run reports, consolidate data and gather customer invoices for review
- Run predictive analytics to deliver a systematic review process and identify high-risk transactions
- Model scenarios to inform strategic decisions and support business planning and mitigation strategies
A competitive advantage
Alongside Robotic Process Automation (which we previously explored in this article) it’s no secret that organisations of all sizes are investing in business intelligence and securing the data and analytical tools needed to generate it.
The ability to spot ‘hidden’ trends, predict issues before they arise and provide actionable insights to all departments is fast becoming a business-critical issue.
Those with a modern finance approach are likely to steal a march on those who struggle to gain visibility over their data and who rely solely on human effort, insight and legacy ERP systems to track and interpret it.
With the advent of highly capable, cost effective cloud solutions, there really are few barriers to delivering a step change in business intelligence.
Richard Baxter is a former Group Financial Controller and qualified Accountant. He is now Financial Applications Director at technology consultancy and certified Microsoft Gold Partner, Tisski