Finance teams are investing heavily in data analytics to bolster their decision-making and long term financial planning in times of political and economic uncertainty.
Since 2012, hiring has reinforced analytics teams with more full-time employees. Those teams are spending 10% more than a year ago. However, these reinvigorated analytics teams are failing to provide the recommendations and information business leaders really need.
In CEB’s survey of 2,000 business leaders, 25% of decision-makers admitted to ignoring financial analysis, while nearly half misinterpret the information. 61% just select the analysis which backs up their gut decision. Given those results, some leaders are questioning whether the investment in analytics is worth it.
Analytics is worthwhile if it can be appropriately harnessed. Often analytics teams are too focused on providing definitive answers rather than helping leaders understand the issue and range of possible outcomes.
Leaders also worry about a loss of control, when decisions are solely guided by finance and analytics. 73% of those polled in CEB’s survey would prefer instead to work more closely with finance teams to collaboratively analyse and understand different scenarios, funding paths and investment decisions.
To provide the best data analytics to support the business, analyst teams should do the following:
1. Don’t wait to be asked
Teams should proactively map out future scenarios well before they happen and well into the future. For example, they should forecast the implications of a rise in interest rates not just for the next financial quarter but over the next three years. The business will thus be on the front foot for any changes and its leaders will be reassured the organisation is prepared.
2. Map out a clear picture—don’t get too technical
Teams should strive to lay out scenarios in clear, comprehensible terms and avoid overwhelming leaders with granular detail.
3. Don’t be afraid to challenge the business
Teams should feel able to challenge leaders’ conventional decision-making, rather than simply telling them what they want to hear. They should feel equipped to recommend something that goes against the status quo.
