The three pillars for exploring the benefits of analytics in the area of Finance
Financial analytics emerged from the need for financial areas in companies to visualize and analyze data to answer business questions, as well as to simulate and predict possible future scenarios, with the objective of assisting in decision-making. In this context, we sought, through maturity research, to evaluate what are the best practices related to Analytics that organizations have carried out in their financial areas.
When analyzing analytics initiatives in a company, it is necessary to evaluate these areas in 3 main aspects: Culture and Organization, Information and Tools, Skills and Competencies.
Culture and Organization — The importance of encouragement to groups focused on analytics
To ensure that the organization has a finance area with high maturity in relation to initiatives of Analytics, it is essential to value an analytical culture, with the area structured in such a way as to promote the development and deployment of new solutions on the subject.
When analyzing the analytical culture of the companies participating in the questionnaire, it can be seen that the main ways for leaders to encourage this topic in organizations are the creation of dedicated positions, specific forums for the discussion of new ideas and opportunities, and the monitoring of indicators associated with analytics, such as the number of solutions implemented and the return and benefit that these initiatives resulted in for the organization.
Regarding the structuring of areas of Financial analytics in organizations, it can be seen that 65% of them are already working on the subject, even with informal groups. In 21% of companies, the issue is already addressed in a formal structure and another 21% are evolving to this model, evidencing the importance given to this agenda.
With the evolution of analytical culture in companies, it is essential that organizations create mechanisms to encourage discussions on the topic, and, consequently, there will be efficient guidance, with an environment conducive to the development and deployment of solutions in Analytics for finance. In addition, another trend observed in companies is the construction of centers and centers of excellence in analytics, which allows the horizontal development of initiatives, standardizing and streamlining implementation.
Information and Tools — The low democratization of access to tools and data
When companies are evaluated in relation to the availability of analytics tools, it can be seen that in about 89% of organizations, employees do not have easy access to these tools.
Another point that signals that companies are not using the full potential of analytics solutions is the difficulty of accessing and manipulating data. According to research participants, 40% of them have significant difficulty accessing and integrating organization data, while 40% of companies realized the importance of being responsive in accessing data and are developing initiatives to make data and information management more effective.
For analytics initiatives to be implemented successfully and recurrently in organizations, the democratization of information and tools becomes essential, since, with the evolution of technology and the increase in the amount of data, tools and data must be easily accessible so that employees can experiment, create new solutions, and deploy in an agile manner.
Skills and Competencies — The focus on data visualization and report structuring
Around 93% of the companies participating in the survey evaluated the ability to visualize data and structure reports as the most important financial analytics competence. This result confirms an expected behavior in Brazilian companies, since the main role of these structures currently is to carry out descriptive analyses and studies, that is, that explain an event that has already occurred. Another point that supports this conclusion is that more than 70% of companies answered that the main application in financial analytics are financial performance dashboards.
With the increased availability and reduced costs of data storage and processing tools, skills related to the development of solutions that use Data mining and Machine learning become increasingly frequent, allowing robust analysis, using the millions of transactional data that a company can generate, as statistical models for credit analysis and fraud detection.
The success in developing an area of finance with an analytical culture is based on three main pillars. The first reflects how the organization and the finance area value analytics. Based on this incentive, the second pillar is to ensure that information and tools are easily accessible to employees, forming a solid base that will support the third pillar, which is the development and implementation of initiatives through people with the necessary skills and competencies.
About the author
Felipe Pena is a Visagio consultant, a specialist in projects focusing on budget management, process engineering and analytics in the purchasing and banking sectors.