As a Chief Financial Officer (CFO), you’re always thinking about the financial well-being of your company. But you may have noticed a shift in the roles of today’s CFOs. As businesses evolve with the world, so will your role in the company. However, despite advancements in data tools and technology, many CFOs and their teams still use Excel to simply collect data manually and save it rather than actually studying and interpreting it.
As a result, data silos become disjointed and inconsistent. Our global economy is getting more and more competitive by the minute. Hence, it is becoming increasingly important for every employee of a company to offer direct value. This means that being a finance executive is no longer enough; you must also be a strategic partner to other business executives.
As a CFO, you have the opportunity to accomplish so much more. This is where business intelligence tools, systems, and dashboards come in. Finance leaders need to use BI technology to collect data from internal and external sources, create analytics, and establish key performance indicators (KPIs) that matter.
What is business intelligence?
Regardless of what product or service you’re offering, every business generates data. Business Intelligence (BI) gives a holistic view of an organization’s data, which can then be used to drive change, adapt to the market, eliminate inefficiencies, and more. BI is a technology-based process that allows companies to organize, analyze, and contextualize data from all around the company.
A BI system wouldn’t be complete without high-quality data inputs that will assist in better decision-making. Your financial accounting software is an important source of shared, accessible data that can be complemented with BI-driven reporting, predictive analytics, data mining, and third-party feeds. Companies can use BI to acquire business insights from current, historic, and even future trend data by combining financial and operational data.
This information can then be utilized to update performance indicators including financial, sales, marketing, and operations KPIs. Companies can use BI to keep a tight eye on their finances, manage their supply lines, and make better decisions on anything from marketing to mergers and acquisitions.
Why do CFOs need BI?
As a CFO, you know that accurate and up-to-date data is critical to your company’s financial health. A BI practice can help your company stay competitive and financially stable by providing quick access to detailed cash flow insights, expense management optimization opportunities, and the ability to make informed cost and profitability decisions, all of which can be tied back to business performance.
Furthermore, your finance team will thank you for integrating BI systems into your business mix. Finance professionals become more efficient at their work and proficient at identifying which actions encourage growth as they become accustomed to consuming BI-driven insights. They become data-driven culture advocates and trusted partners to the rest of your firm.
Benefits of BI
By integrating proactive data management with process automation and business analytics, BI provides a basis for numerous essential advances inside every company, including:
1. Optimizing your company’s supply chain
With BI, your company can quickly and easily examine every step of the supply chain. You can optimize inventory, distribution efforts, transit routes, and more by forecasting order trends. As a result, you save money for the firm and improve customer satisfaction.
2. Predicting and responding to trends within your industry
Never underestimate the value of helpful visualizations! Well-designed dashboards will help you notice trends quickly and easily. Once you’ve identified what the trends are, your team can better determine how to respond to them. With this better awareness of trends and faster response time, you can enjoy a competitive advantage against your business rivals.
3. Measuring marketing profitability
Any customer relationship management (CRM) data obtained by your company will provide insights into the return on investment (ROI) or profitability of marketing efforts. Using business intelligence to track ad expenditure, email marketing effectiveness, and the overall success of a campaign will highlight where your company’s messaging connects and where it doesn’t.
4. Making better business decisions
Improving decision-making is one of the key purposes of BI. Financial professionals can get real-time visualizations of anything from sales success to income or expense assessments to supply chain performance using integrated dashboards. With this knowledge in hand, your finance team has the best possible foundation for future planning.
5. Reducing risks
Your company can reduce risk by adopting BI technologies to watch financial activity and detect fraudulent behaviors in near-real-time. BI systems may also monitor employee behavior to guarantee compliance with industry rules. BI also helps in improving your compliance efforts. Compliance landscapes may be quite complicated, encompassing anything from data privacy concerns (HIPAA, GDPR) to export regulations, anti-corruption measures, and tax challenges.
6. Enjoying better communication
With proper role-based access, BI tools ensure that everyone has the same data at the same time. Say goodbye to double-checking Excel spreadsheets or waiting for separate data source analysis. With BI, teams can tell better stories with richer data thanks to a centralized data warehouse with role-based access, data-rich KPIs, and visualizations.
Better business results with better systems
The role of the CFO is changing to embrace so much more than what it meant years ago. This makes it a really exciting time to be in this position. By harnessing the capabilities of BI tools, you can enhance the CFO’s function and deliver more meaningful, data-based insights to your company. Not only will BI help you create greater value in your job as the CFO, but it will also benefit the entire business.