This is our fourth and last article of the four-part From Average to World Class series. So far, we have discussed the birth of Next Generation Finance, the Roadmap to implement an analytics culture, and the Mindset aspirations to decision making. In this article, we conclude by taking the temperature on where Finance is on its journey towards becoming world class.
The information in the article and more will be covered at JPK Group’s 2019 Analytics Academy. Click here for more information.
Next Generation Finance should act as a predictive analytics powerhouse that influence and impact business decisions. But, too often, Finance hasn’t updated its skill set and systems toolbox with the most emerging technologies. As such, Finance still operates largely as a spreadsheet-driven rear-facing accounting and reporting center.
Our research, shown on the chart below, indicates that Finance organizations surveyed, spends some two thirds of its time in data collection (29%) and gathering data and compiling reports on historical performance (38%). This leaves precious little time to provide high-value add analytical insight and foresight.
The chart further illustrates how most Finance functions are 20-30 years behind the evolution of analytics, as only 1% have aligned their capabilities to the 2020 emergent technologies like Big Data Analytics using artificial intelligence and Monte Carlo to simulation.
This is backed up by the chart below that show that the main analytics tool for Finance is still Excel. Only some 12% of Finance groups surveyed have access to high value-add analytics tools like Desktop Statistical or Discovery, Visualization & Analytics tools. This is staggering, as in the 21st Century, the Finance predominant tool for reporting, visualization, and analytics in 20th Century technology!
Further our study reflected on the chart below, shows that less than 1% of Finance organizations see itself as Strategists who predict events and simulate risks and opportunities. 33% self-classify as Advisors where they use statistics to influence decisions. While 50% are Commentators focused on hindsight reporting and variance analysis. The remaining 17% of Finance organizations consider themselves Reporters focused on data capturing and delivering timely and accurate standard hindsight information.
There is quite a way to go for Finance to become the world class strategic partners, but Finance has the interest and intent to move beyond the trusted scorekeeper towards the strategic business partner. Our research shows that 67% aim to become Strategists in the future, 22% Advisors, 17% Commentator but, most important, no one wants to remain Reporters!
If you are interested in World Class Business Partnering, the journey towards Next Generation Finance and how to become a Strategic partner then join us at the Analytics Academy in San Diego from September 18-19th 2019.
Click here for more information and to register!
The original article was posted on LinkedIn: https://www.linkedin.com/pulse/assessing-finance-journey-towards-world-class-hybholt-sorensen/?published=t
This article is a collaboration between Robert J Zwerling and Jesper H Sorensen from the organization Finance Analytics Institute (www.fainstitute.com) and is an excerpt from their book, Implementing an Analytics Culture for Data Driven Decisions – A Manifesto for Next Generation Finance. Robert and Jesper are the content creators behind the Analytics Academy and will teaching at the Academy in September!
Copyright 2019 Finance Analytics Institute, Robert J Zwerling & Jesper H Sorensen. All rights reserved. No part of this document may be reproduced without this copyright notice.