5 Reasons Why Finance Teams Need to Harness Their Data and Become Better Storytellers
May 13, 2020
Harvard professor Dr. Howard Gardner once wrote, “Stories constitute the single most powerful weapon in a leader’s arsenal”.
It’s a statement that’s just as true for financial leaders as for anyone. But transforming financial professionals from reporters into storytellers means introducing a new outlook and approach—and reinventing old processes to do so.
That’s where financial reporting comes in—but not the traditional approach to reporting some teams are used to. Reporting today is more dynamic, relying less on manual processes and more on self-service and automation. It looks forward as well as back, and is enhanced by visualizations and intelligence to enable real-time analysis. This more agile way of reporting—empowering timely, data-driven storytelling—helps FP&A teams reach insights faster while also helping them prepare their companies for today and tomorrow.
By pulling on well-sourced data and using solutions, such as business intelligence, data analytics and real-time visualizations,agile reportingconnects the dots, identifies new trends and communicates the insights revealed behind the numbers—creating a narrative of your company’s financial health: past, present and future.
Telling a Data-Driven Story
Survey datafrom the Association for Financial Professionals shows that data management and predictive analytics are considered two of the most important skills FP&A professionals can have—yet the same survey revealed that only 57% of modern FP&A teams use business intelligence tools. While finance professionals see the importance of being able to quickly visualize and communicate trends and insights to the rest of the executive team, then, they often need to fill in the gaps. By building a narrative that reveals the insights that emerge, agile reporting helps do that.
Agile reporting and data-driven storytelling help finance teams react in the present and plan for the future, especially during times of change. Consider these five reasons why:
1. The Story is Still Evolving
When market or business conditions change—for good or bad—your financial story changes with it. Yet you can’t afford to put your decision making on hold. You need to start planning for the future today—and continue to do so until you reach more steady ground.
This makes constant measurement crucial. To keep up with the changes unfolding, many finance teams increase the rhythm of their reporting to constantly monitor their business in order to identify shifts in the story. This allows them to act on critical insights faster and to identify anomalies in the data—diving deeper as those changes happen. Automated reporting and real-time financial dashboards are key, allowing you to:
Monitor progress against strategies
Identify emerging trends
Determine metrics on the fly, or as the process demands
This gives finance teams the information they need to make better, quicker decisions and introduce company-wide initiatives that keep their business on the right path even as the world changes around it.
2. Looking at All of the Data (and Beyond) is Key
Any good story has a beginning, middle and end—and agile reporting takes all three into account. That means comparing data over time—whether it’s year to year, or day to day in times of change—to see how trends have emerged and where they’re going. It also meanssourcing disparate types of data from multiple sources—both financial and non-financial—to get the complete story in a single place.
Agile reporting also takes into consideration the fact that all of the data you need doesn’t always exist—or that you may not have the means to collect, analyze or report it. Data visualization can begin to unveil the story underway, identify the relationships and patterns that emerge, determine new trends to let you get on top of them, and answer ongoing questions. It can also help:
Identify which areas need urgent attention
Predict sales volumes, new opportunities and trouble areas
Establish a better picture of customer behavior
By working with the best data you have access to, and combining that with visualizations that allow you to connect the dots between the data points you have, you’ll be able to offer insightful, in-the-moment reporting on the story unfolding. You’ll also be able to present it to the rest of the company in a way that’s actionable and easy to understand.
3. Understanding—and Caring for—Your Customers is Crucial
Your customers are the core of your business, and the way they experience your product or service is ultimately the underpinning of your company’s future health. Agile reporting can help unveil potential hiccups in the customer experience, letting finance teams steer the best course to maintain those crucial relationships.
The best finance teams listen closely to their customers, and put weight onto what they have to say. This may mean analyzing online customer feedback or talking to the customer service team. It could also be a matter of picking up the phone and initiating conversations with key clients. It’s through these conversations that strategic finance teams start to understand what questions they need to ask about the data and how to identify important trends.
By doing so, those teams can ensure that they’re keeping up with the trends and getting a sense of what they’re doing right or wrong through their customers’ eyes—determining pain points and identifying the investments most likely to maintain customer satisfaction and reduce churn.
4. There’s a Greater Need for Transparency
Uncertainty breeds uncertainty, so it’s no surprise that people—most noticeably executive teams—want clear and constant answers during times of change. In fact, they need them to make crucial decisions at every turn.
They’ll come to the finance team to get those answers. Agile reporting ensures they’re always ready: whether there’senough cash flowto maintain current plans, if headcount changes need to be considered and what other challenges have been revealed. And through live dashboards and real-time visualizations, the rest of the executive team can follow the story as it unfolds. With instant access to critical data, available in a way that’s easy to understand at a glance, they’ll be able to contribute to insights by connecting anecdotal operational stories back to the numbers. They can then determine the weight those anecdotes should have as well as the scale of any changes underway.
5. Tough Decisions Are Required
Storytelling is at its most effective when it empowers you to act. But determining the best decision can be difficult even in steady times—in times of change, strategic decision making is even more complex. Teams need the right information at their fingertips to fuel them when it’s time to pull the trigger. Armed with real-time agile reporting that’s connected to the full business—as well as customer focused and transparent—teams can feel confident that they’re making the best decisions they can.
Through the story that’s revealed, finance teams can determine the best places to make strategic changes—helping their company plan for today and for tomorrow and positioning it to thrive in the new world that emerges.