Businesses are operating in an increasingly volatile environment, with reduced response time to critical changes. In this context, business analytics is seen as a crucial asset, offering companies potential benefits in terms of information management and reporting. Business analytics involves producing in-depth analyses to gain unique business insights and estimate financial outcomes based on factual and reliable findings, rather than intuition. The rise of analytics in CFO roles is driven by factors such as increased expectations for meaningful partnerships, pressure for transparency from investors and stakeholders, economic uncertainty, and regulatory changes.
While transforming data into information is a technical process, converting insights into added value requires a deep understanding of their implications for business and finances. The finance function, in collaboration with cross-functional departments, monetizes all company actions and activities, translating financials into business activities. This unique position allows finance to gather data from every department, process it, and deliver it to management (EY 2021).
So, how can businesses leverage business analytics effectively?
Improved Revenue Forecasting
By evaluating relevant data and providing actionable insights, data-savvy companies outperform their peers in future productivity. Integrated core business analytics systems enable finance teams to predict product demand, leading to accurate revenue forecasting.
Analyzing Customer Profitability
Modern analytics technologies help identify highly profitable customers and understand the factors driving profitable business partnerships. This knowledge enables reevaluation of agreements with high-maintenance consumers, focusing on more lucrative clients, and exploring opportunities for cross-selling and finding similar customers.
Enhanced Business Intelligence
Big data analytics improves business intelligence processes by unlocking insights from vast amounts of inactive data. Analytics tools analyze data on consumer demographics, delivery schedules, and employee compensation, providing valuable insights for decision-making. Visualizations and dashboards enable well-informed decision-making and empower data-driven choices across the organization.
Innovative Marketing Strategies
Analytics prevents wasteful spending on ineffective advertisements. Sentiment analysis, text analysis, and traffic data analysis provide valuable insights about potential customers. By targeting and customizing ad campaigns based on analytics insights, businesses can save money, lower customer acquisition costs, and measure the effectiveness of branding efforts.
Increased Productivity
Analytics and the digital revolution enable businesses to adopt new techniques that drive productivity breakthroughs. Zero-based budgeting (ZBB), digital manufacturing and printing, supply chain 4.0 intelligent process automation, and smart expense optimization are tools used by organizations to boost productivity (McKinsey).
In conclusion, big data and analytics provide the technologies and tools needed to create a future where enterprises operate with minimal resource and time wastage. Businesses committed to transformation should invest in analytics to harness data exploitation, which creates new competitive advantages internally and externally.
