Analytics plays a vital role in continuously monitoring and measuring business performance. It can help with planning, budgeting, forecasting and accounting to improve accuracy and identify opportunities, risks and any trends facing the organisation. Analysis is perhaps one of the most critical aspects of financial planning and analysis (FP&A) and yet, it often receives less attention.
Put the "A" back into FP&A
The Financial Planning and Analysis (FP&A) function's role is to assemble and update budgets, plans and forecasts. The emphasis of the FP&A group should be on detailed, forward-looking analysis that enables executives to do contingency planning, consider their options and anticipate the impacts of specific positive and negative events.
However, according to findings from Ventana Research, the mechanical process of pulling together, integrating and collecting the data and then reporting the results takes up so much time that there's little time left for analysis. And most of the analysis done is historical and descriptive rather than forward looking and prescriptive. In fact, 68 per cent of employees spend most of their time on these data-related tasks, while only 28 per cent of those are focused on analysing that data.
Add Flexibility to Reporting With Performance Management Software
In addition to the lack of analysis, Ventana also found that only 31 per cent surveyed said their financial and management reporting was timely. And, if you're relying on spreadsheets, the story gets even worse and is difficult to modify. This is where the right Enterprise Performance Management (EPM) software can help in automating and removing the manual repetitive work involved for FP&A Managers and finance teams as a whole, while also improving the effectiveness of their reporting on the analysis, by making the reports more timely, visual and interactive. The production of periodic reports is automated, while dashboards within the software clearly present updated information in a visual way to engage users and increase the visibility and clarity of reports.
The results speak for themselves. Research by Aberdeen Group examined financial planning performance and found that organisations that lead their fields in advanced planning are 61 per cent more likely to take advantage of EPM software than those firms lagging behind. Not surprisingly, those industry-leading businesses are more adept at preparing financial reports in time to use them in the decision-making process - 89 per cent compared to just 66 per cent of the non-leading firms.
To learn more about how to use analytics within enterprise performance management software to improve reporting download the Ventana Research Report: Analytics is Critical to Effective Performance Management.