Less than half of finance professionals have indicated that they are using forward-looking insights, but at a time when an agile response to change is paramount, is there a danger that this is a missed opportunity?
The use of analytics by finance and accountancy professionals is not new. Many finance teams have been using data to report on trends and past performance since the 1980s. However, the volume of data that we, as a society, create and the availability of computing power to process and analyse it means that we can do much more than just look at past trends. In times of rapid change, business leaders are seeking insights into what might happen rather than just focusing on what has already happened.
The four types of analytics
For many finance teams, the core function has been descriptive and diagnostic analytics. Understanding what has happened in the past and how the organisation performed against its objectives.
Now organisations increasingly focus on the 3Ps (people, profit and purpose) in defining their strategies so measuring a broader range of performance targets becomes important. The use of more predictive and prescriptive analytics to look forward across this broader range of measures is becoming essential for organisations. Finance and accountancy professionals need to grasp this and ensure that they have the relevant skills to do so.
Data governance and data accuracy
We need to recognise that the data that we need to work with comes from a variety of sources. It may be structured data, or unstructured data such as video, audio, text and email. Any information that helps us understand organisational performance and the behaviours of customers. Finance professionals need to play a full role in data governance and data accuracy.
Continue to learn
The use of machine learning algorithms applied to the data sources can give us insights into the future. However, we need to make sure that we have the skills to understand the narrative that is being suggested to us.
Developing these skills is essential. They are a combination of technical and professional skills. It is important that the finance and accountancy professional continuous learns as each of these areas evolves.
This article is in partnership with the ACCA.