Finance professionals 'lack analytics insight'
Finance professionals are failing to exploit analytics software to add greater strategic value, and trail behind other specialists in adopting the technology, according to a study.
A survey of executives in a variety of roles at 297 UK mid and small-sized organisations found that just 2% of finance professionals have fully implemented analytics software and more than a third (35%) are yet to even consider doing so.
The finance specialists lagged behind all other departments, apart from human resources, and their understanding and take-up of analytics solutions.
Senior managers now expect finance professionals to analyse large volumes of data with greater speed whilst understanding the wider impact on a business
The study, Advanced Analytics report 2015, was carried out by Source for Consulting in partnership with leading business applications and service provider, Advanced Business Solutions (Advanced). The research suggests that analytics is most likely to be used, at least partly, within marketing departments (48%) and amongst senior decision makers (44%).
What is analytics?
Overall, only around one in five of all respondents (19%) agreed that they understand what is meant by “analytics”. While there is not a hard and fast definition of analytics software, broadly it is a tool for transforming data into insights that can support business decisions.
Analytics looks at historical data to spot trends, provide explanation and model what might happen in the future. Applications can look at structured data (such as financial metrics, customer satisfaction ratings, and response time to issues) and unstructured data (such as mentions on social media, instant messaging, and video data), and the sources can be internal or external.
At the ICAS Conference in November, delegates heard how KPMG is using analytics tools developed for Formula 1 teams to enhance the value of its auditing processes.
Simon Fowler, managing director of Advanced Business Solutions (Commercial division) said: “Senior managers now expect finance professionals to analyse large volumes of data with greater speed whilst understanding the wider impact on a business.
"Due to being restricted by spreadsheets they can often be seen as more of a hindrance than help, which is a perception they must change."
“Modern analytics technology can quickly gather relevant information and provides a level of insight that isn’t possible using traditional methods, enabling finance workers to add greater strategic value and reposition their relationship within an organisation.”
Why use analytics software?
The survey respondents put forward a number of suggestions as to why businesses should invest in analytics. These included:
- “Enhancing decision-making ability” (86%)
- “Improve understanding of why things have happened” (69%)
- “Realise financial benefits” (62%)
- “Having access to information more quickly” (58%); and
- “Reducing time spent on producing reports” (45%).
Simon added: “Financial information is largely structured, so it’s important for businesses to integrate their chosen analytics software with a leading financial management solution. Ensuring tight integration between different systems also provides increased confidence in the underlying data which is vital to leverage the full benefits of analytics.”