Roadmap: Finance transformation by Finance Analytics Institution

Leadership and eternity are transforming accounting and finance professionals into leaders. Now we’re going to talk about the finance transformation roadmap so if you can see it on your screens this is the complete roadmap that would quite be useful if you would like to transform your accounting and finance function. 

From the average to world-class so if you see on the y-axis on the left-hand side is this is a diverse skill set that you’re accounting in finance. In need in order to transform your finance function that usually includes data analytics. Ranging from descriptive and then the days diagnostic is in the text your predictive and prescriptive analytics because when we talked about acting as a finance business partner or a strategic adviser. To business, we really don’t need to do a master in supply chain or marketing. Or some other non finest business functions like HR or IT what we need to do we can make and leverage the use of data analytics to support different finest functions. For example, using customer analytics, you can support sales and marketing functions using operations analytics you can support your supply chain operations. 

Function using people analytics you can support your HR function so using this data analytics technique which I’m going to talk about how you can support your business function as an advisor or as a strategist. So if you see on the x-axis these are the advanced toolkit that you should have in order to transform your finance function from average to purchase so at a very low level. If we see that the reporting side this is usually all the traditional accounting in finance from they’re doing the counting section they do the monthly closing then the financial reporting manager or the Karin-san finance manager. They do the reporting they report the past performance that includes the financial performance financial position the cash flow position for the last month or for the last period. Then to some extent, they also do some sort of analysis so on the reporting side they are just working on what happened in the business. So if we take the example of sales let’s suppose you can use a similar example for your expenditure for OPEX and CAPEX as well. So if we take the example of sales to understand this roadmap let’s suppose in the reporting you mentioned that your sales have been declined for the last period or for the last month. So this comes under the reporting then you do some sort of descriptive analytics writing and the lies like you where did it happen this usually most of the finds function they do. For example which products or services sales decline in which market segmented decline in which region in decline this usually we do in our dashboards. In our different business intelligence tools that we usually use this sort of reporting and analyzing and analysis, we usually do and we act as a reporter or commentator. Here but in order to move upward at a more advanced level, you have to do some sort of diagnostic analysis as well where you will ask questions like why did it happen. For example, if the sales decline or dropped for the last month or for the last period why the sales decline what was the reason is it due to some internal reasons or due to some internal factors. Like your quality or operations, the supply chain, or is it due to some external factors like computed directions or changes in the industry or markets or changes in the consumer behavior or changes in the economy. So there could be several external internal factors so here you can do in the diagnostic analysis or diagnostic analytics you can do some sort of analysis like why the sales happened. 

Why did it happen then if you move one step further and you want to act as an adviser? Then you should not only talk about the past you have to talk about the future that you can do it using predictive analytics like here if you can see what might happen. For example, if we take our example of sales like if the sales have been declined during the last couple of months over the last period. Then you should be able to predict what is going to happen next whether the sales will further decline whether the sales will remain the same or whether sales are expected to be increased based on your analysis. Lots of internal factors and external factors could be on that basis on that analysis on that data you have to predict the future than at the highest level. At the world-class level, you have to act as a strategist and to act as a strategist you need to use prescriptive analytics like if the sales decline and you have the sales prediction for the upcoming month. What is going to happen next you should be able to advise your management how can we make it happen if you are acting as a strategist you should give recommendations or prescriptions to your management like what strategic move. They should take to increase their sales to increase their revenue, for example, it could be changing in your business models. It could be changed in your customer value proposition depending upon lots of analysis what you do already you do in this analytics and tools we shot you can on this vessel you can advise your senior management. Or your board or your CEO like what a strategic move what should we do next how we can make it happen so here is called as prescriptive analytics. So these are the analytical tools or you can say the analytical intelligence that your finance and a caring function can use to act. As a finance business partner or strategic advisors through your business and these are the different tools and this should be in your advanced toolkit. For example obviously the reporting we are doing usually from the exit if you see one here on the x-axis we were usually done in the excel for past several years now we have powerful ERP systems SAP Oracle and different ERP powerful systems. We have already known that you can use them for data analytics now we have also lots of data analytical tools available in the market. For example W or Python or R programming and also several analytical tools offered by SAP and Oracle as well so if you see on the x-axis here when you acting as a strategist you have to not only report the numbers and making predictions. You have to have a big influence on the organization on every non-finance business function and you have to collaborate with all known finance business functions. For example, you have to establish a very strong business or working relationship with the sales and marketing function then only you can only able to get all the data and insights regarding the customers. Like why the sales happen where did it happen how it is going to shape in the future so this all these questions analysis obviously you can do only when you have a strong collaboration strong working relationship with the sales and marketing function. And you can support them using your analytics you don’t need to do masters in sales or marketing to advise them you can use the analytics techniques you can use your diagnostic and other days predictive analytics your understanding of the business. 

In the understanding of the value creation model of your business understanding of the market understanding, your industry you can support them and you can advise. And basically what this stuff so what is a strategic move they should take so here the collaboration is very important and then the fluence inference needs your leadership skills. So here it comes into play you’re really shipbuilding skills and leadership skills that are very important so you can see here different tools and techniques that you can use like you can use some visualization analytical tool as I already explained to you so if you want to implement this culture. Or we can sell in the tech culture in your organization first of all what is the most important thing is about the mindset you should have this rosy-cheeked mindset or the business mindset. If you have a traditional accounting or number-crunching mindset of course this is not possible to transform your accounting function so first and the most important thing if you see here on the x-axis this is your mindset you should have the right mindset. You have the growth mindset you have the strategic mindset so not only your support and contribute but you will be able to influence and impact your strategic business decisions. And help the organization to accomplish its strategic objectives then the second most important thing is the people experts you should have the right people you should have the right processes. Then as we already talked about if you see on the y-axis the analytical intelligence. For example – predictive analytics prescriptive analytics you should have this in your toolbox then you should have the systems in place like analytical tools like W as I mentioned different verticals tools or available in the market SAP Oracle. They are also offering even you can outsource your analytical data analytics to somewhat sourcing from these days. So lots of options are available so this is basically the complete roadmap if you want to implement this culture and if you want your accounting and finance function to move from the role of reporter commentator to adviser and strategist.

Leave a Reply

Your email address will not be published. Required fields are marked *