The Office for Budget Responsibility has lifted its economy growth forecast to 2.7% for 2014, a factor that undoubtedly helped to strengthen the Chancellor’s hand in the Budget. Corporate UK will be relieved to hear that it has gained some ‘wriggle-room’ and that there is a real opportunity to drive business forward and one of the ways of doing this, is by adopting a more data driven culture.
Balancing the Budget, as the Chancellor maintains, is all about making critical decisions based on complete and accurate data but still too many prefer to use gut instincts for business performance insights. Too many decisions are based on incomplete and inaccurate data because Corporate UK has yet to grasp the importance of investing in analytical tools that are intuitive and relevant.
This failure to champion a corporate environment that values data driven decisions and effective analytical capability is not solely the preserve of Corporate UK. Many of the global organisations we talk to have found the promise of information on tap to be a non-starter and are hampered by the fact that no measures have been put in place to ensure data resides in one department or one system. The result is that the quality of the insight suffers and the value is lost completely if that insight is delivered late.
Agility is key and the companies that arm their operational Executives with more relevant insight at a tactical level at the point of decision to boost efficiency and drive more profit to the bottom line are set to become the Budget winners in 2014.
What will separate the winners from the losers is the mind-set and infrastructure that is promoted. This begins and ends with an established process to define and articulate KPIs – the operational metrics that drive a business forward. And this is where the challenge lies. In order to populate these key metrics with fresh and relevant data, tools are needed to access and organise the information that is commonly scattered across it.
For those that run multiple business units across several countries, consolidating multiple databases requires a massive manual overhead and reporting by customer or product and comparing performance against budget is always likely to be complicated and time consuming. To put it simply, frustration arises because the information is there but making the link is difficult.
The automated creation and delivery of a system that re-connects business users to the business information they require for accurate decision-making is the solution and it is this level of financial insight that is increasingly driving business direction.
Delivering the right accounting intelligence to the management team through a reconciled view of the whole enterprise enables the collation of all into a single reporting database allowing the team to go directly from the Board Summary Level to individual transactions and gain insight across a wide range of elements not previously available on a single report, including General Ledger, Sales Ledger, Purchase Ledger and Inventory Ledger.
Financial reporting is changing and in this new and agile business world, it is no longer acceptable to have management reports delivered five days after month end. Nor do managers want to spend time arguing about the accuracy of information or waiting for finance to rework complex spreadsheets. Access to real time information is critical with analysis in multiple dimensions with immediate comparison of actuals versus budget.
Agreeing on figures may sound like a pipe dream but by leveraging real-time insight into performance by multiple dimensions and against budget is the only way to drive significant business change.
The executives that drive major performance enhancements through analytical capability with a time tested process for defining and communicating KPIs are achieving a growth in operating profit and year-on-year reduction in operating costs. These leaders are defined by their ability to leverage analytical capability for real tangible performance. Right insight at the right time enables decisions to be made quicker and in the best interest of everyone.