11 Jun The Importance of Financial and People Analytics: The Definitive Guide for CFOs and Auditors
Financial and people analytics is the future of finance. They provide a deep understanding of how money moves through an organization, as well as insight into the human dynamics that drive it.
One of the things that financial and people analytics can do is help a Chief Financial Officer or someone in senior management position understand their organization better by using data to identify strengths, weaknesses, opportunities and threats.
By implementing broad system improvements they can also make good decisions about how to prioritize resources on what’s important and allows the company to remain leaders and an example in the industry of good organizational operation and governance.
When you have this information at your fingertips, you can make better decisions for your company’s strategic direction, for budgeting and planning, for hiring new employees, or for making changes to existing ones.
In this blog post, we’re gonna discuss how you can use financial data, machine learning, and predictive analysis to optimize support decision making and strategic planning. In the age of technology, it’s important to remember that analytic tools can create business opportunities and address core problems within the financial team and by extension, the business.
How can Data Analytics assist Finance Departments?
By incorporating machine learning tools and predictive analytics, into your financial analysis strategies, you can stay ahead of the curve.
Machine Learning is a subset of artificial intelligence that uses algorithms to be trained on data sets in order to predict future outcomes. Predictive Analytics (from here on known simply as “analytics”) use mathematical models to understand patterns or trends.
As more companies and organizations begin recognizing the value of data and data analytics to business strategy, leadership, revenue generation and performance, it is in the best interest of the finance employees, executives and auditors to embrace the global paradigm shift to data and analytics and its potential to provide insights and as industries remain forward-looking.
How to be A Better CFO using Analytics
For the CFO, it is your responsibility to ensure that the company’s risk tolerance is balanced with profitability. Analytics can help you identify patterns in spending, detect fraud and uncover opportunities for cost savings or resource optimization.
It also helps to predict how a company might fare under a range of different circumstances, such as changes in interest rates or oil prices.
Data analytics can allow the finance manager to make decisions using big data that improve performance, sales, expenditure, and customer satisfaction.
And, with the right tools, management and finance teams can improve business performance through insights obtained in real-time.
Essentially, analytics allows the CFO to increase operational value and to improve the value chain through digital data-driven strategies in a cost-effective manner without compromising on quality.
How can analytics be a game-changer for auditors?
When external auditors have to review finances from companies and organizations, the process can be a lengthy one. In some cases, an auditor may be on-site at a company for days or even weeks depend on the duration of time that the review covers.
Incorporating data analytics into the process can decrease that time allowing for the reporting to illustrate a deeper engagement with key business documents without losing countless hours of your life.
Data analytics in auditing can increase efficiency and provides the auditor access to the up-to-date, accurate, and reliable financial information that can be used for day-to-day operations at their company.
People Analytics: A People-Centred Approach to Success in Business
People analytics is a relatively new term that refers to the use of data and analytical techniques to better understand, predict, and optimize human behavior in organizations. People analytics is already being used by some organizations as a way to identify potential talent gaps through predictive analysis.
In addition, people analytics can be used for succession planning—identifying where future skills shortages may occur and can allow companies to proactively address those gaps.
People Analytics and the Work Force
Since people analytics is about understanding and optimizing human behavior, it naturally extends to how we recruit talent; there are now a number of tools that help companies identify potential candidates based on past performance and desired competencies as well as matching them with positions within the company where they would be most likely to succeed.
Your human resources are your greatest resources.
Using employee data is also intrinsic to making the most out of the skills that your workforce already possesses and can save time and money that would have been spent on outsourcing employees or hiring external companies and firms to provide the needed expertise.
This immediately turns into savings that can be redirected to improve the work environment for employees or to other areas which require economic injection based on the data driven insights that you have obtained by combining financial analytics and data analytics together.
People Analytics and Customers
The beauty of people analytics is that it can be applied to customers and clients as well.
People analytics implemented by incorporating artifical intelligence and data analytics can help financial organizations, businesses and companies make better decisions about their customer base to promote sales and prevent losses.
This can be done by analyzing customer behaviors to find patterns such as which customers are likely to defect and provide potential tipping points for the company in terms of customer experience.
It also provides a more personalized approach which will help businesses keep their costs down while simultaneously maximizing on profits from the business that they have.
This is because people analytics can use your data to predict outcomes in a fast and reliable way that takes some of the stress out of the process.
When your employees have consumer data in front of them in real time:
- more time can be spent on strategy to increase areas where there is low performance
- you can improve ability and strategy for communicating with clients
- you can offer better customer support, optimize processes
All these changes can translate into financial results that accounting data and client transactions will undoubtedly reflect.
How Can I Incorporate Financial and People Analytics into My Organization?
Regardless of whether your financial team is compromised of seasoned data experts or novices, there are companies and services which can work alongside your team to help. Advanced analytics and incorporating the right tools can allow finance leaders to gain greater insight in less time and helps departments that work in conjunction with finance function at their best.
Incus Services can help.
If you’re a data novice, start or looking to get the most out of your existing data management, get into contact with them about their workshop or specific services that are tailor made for finance organizations.
But the workshop is just the beginning. Consulting with Incus Services as part of your data improvement drive can make the difference between being a leading organization or falling behind the competition.
Incus Services can work closely with your organization to help your data talk to you and offer key insights. It is our objective to provide businesses with the machine learning and artificial intelligence strategies that they need to succeed.
Aren’t you ready to take your business to the next level? Why wait another moment to lead the finance sector through technology and digital transformation?
You’ve got the data and Incus Services has the expertise to help you remain long-term leaders in your field.
Here are some great finance analytics examples that you can model and implement in your own organizations.