Financial Reporting

  When it comes to reporting, financial dashboards have emerged as an important part of the process. Acting as a powerful data visualization tool, a financial reporting dashboard—such as one powered by Excel—shines at showing key pieces of data, visually telling a story and purposefully informing business decisions. For financial professionals working in any industry, dashboards can be the key to effectively understanding and presenting a company’s overall health and vision for the future. Keep reading to find out how financial dashboards in Excel support reporting processes and to learn more about the top three financial dashboards and models that enhance your reporting processes. How Dashboards Enhance Financial Reports Essentially, financial dashboards consolidate a company’s performance data into a single picture. They enable both financial professionals and decision makers across the organization to easily understand what’s going on with the business.  The most effective dashboards draw meaningful data correlations, deliver actionable insights and/or highlight variances in financial trends. What’s more, they show key financial performance indicators (KPIs) in real time so viewers can quickly prioritize their areas of focus and take action.  According to Khurram Chohan, CFO of TogetherCFO, “Having a clear financial dashboard is the key to making better business decisions and being able to act faster.” By providing a common visual language between finance and non-finance audiences, a financial dashboard also helps foster a culture of collaboration, transparency and accountability across the organization. And that’s increasingly important because the financial planning and analysis (FP&A) team is evolving into a central hub for measuring the health of a business.  As Marjorie Adams, CEO of Fourlane, advised businesses, “Don’t just track finance, every department’s numbers have an impact, so collect them all.” (Check out The Ultimate Guide to Corporate Budgeting to help you better put finance at the heart of everything your company hopes to achieve.) The Increasing Importance of a Financial Reporting Dashboard The demand is growing for consolidated data and strategic insights across business units and functions. This means that FP&A professionals need to get savvier about predictive analytics and performance management. They also have to adapt and learn quickly from more holistic views of historical data—integrating a company’s past, current and projected numbers.  Justin Goodbread, CEO of Heritage Investors, explained, “The goal is to have your financial reports provide a story that giv[es] you a complete picture of your company’s past, present, and future financial health.”   The good news is that a financial dashboard makes it easier and faster to aggregate and analyze financial data. It’s empowering finance teams to focus on key company metrics and to understand how they’re affecting the company’s bottom line and other crucial KPIs. Beyond traditional finance metrics, it’s giving them greater visibility into the health of the business as a whole.  Indeed, with the growing influence of the finance team over high-level business decisions, being able to analyze a company’s “big picture” is more critical than ever. But how exactly do you create clear and strategic dashboards to effectively track and evaluate your entire organization’s health financially? It comes down to building the right dashboards—with the financial metrics that truly drive an organization’s overall success:  Business health Customer health Employee health  Here’s how to elevate your reporting and analysis with these three critical dashboards. Top 3 Financial Dashboards Business Health Dashboard Arguably, finance’s most important role is proactively measuring a company’s financial situation and overall sustainability. Generally speaking, business health dashboards should evaluate both short- and long-term financial metrics (based on a company’s short- and long-term goals). And to ensure full transparency and visibility, they should also include budget to actual variance analysis.  There are several critical areas to consider, but here are the most important metrics for building a business health dashboard: Revenue and Net-New Revenue: The most crucial measurement of a company’s financial position is its level of profitability. While liquidity, solvency and operating efficiency are all important, the bottom line is that revenue, net-new revenue/revenue growth and profit matter most and being able to visualize how those numbers are trending is vital. Net Profit Margin: The ratio of profits to total revenue is the most telling metric for assessing profitability. A simple profit dollar figure simply isn’t enough to determine a company’s financial performance. A company might show a multi-million dollar net profit, but if that represents a low net margin, even a slight increase in operating costs could be disastrous. Conversely, a high net margin indicates more financial stability and flexibility for dedicating capital to growth and expansion. Net profit margin allows finance professionals to measure what percentage of total revenue translates into profit. While that margin often varies by sector, this metric is critical for projecting future profits and setting business goals and key milestones to directly shape decisions about business and operating expenses. LTV:CAC: This ratio compares a customer’s lifetime value (LTV) against a customer’s acquisition costs (CAC)⁠—the costs associated with earning their business. For a business to be viable, the investment spent to acquire a customer not only has to be paid back but also has to generate a healthy profit. Companies can’t afford to miscalculate the potential of this value. Essentially, the LTV:CAC metric indicates whether a company is well-positioned for long-term growth and whether it can strongly influence decisions about sales and marketing operations. In general, a healthy ratio is 3:1. See how Vena’s new financial dashboard tool can help you gain more visibility into your company’s financial soundness. Customer Health Dashboard Finance teams (especially with subscription-based business models), need to measure how existing customer relationships are impacting the bottom line. This enables finance leaders to help sales and customer success teams understand where they should focus their efforts and resources.  Beyond the numbers, customer health data provides insight into the stability of the company’s overall customer service function. After all, it’s always cheaper to retain an existing customer than to sign a new one.  Here are the most important metrics to include in a customer health dashboard: Number of Active Customers: It’s important to show a visual comparison of actuals versus projections. This helps sales and marketing departments understand if they’re above or below expectations. Gross and Net Revenue Retention: Are your customers renewing their contracts or are they spending their dollars elsewhere? This helps companies measure customer satisfaction through a finance lens. Time to Value: How long does it take for your customers to start leveraging the value of your product? Especially important for technology and SaaS organizations (with longer product implementation times), this metric helps finance departments gauge whether or not a company needs to invest more in a customer success function.   Learn why John Daniels Associates relies on Vena to help their clients grow. Employee Health Dashboard Without a doubt, a company’s most important asset is its people. Employee trends and behavior affect a company’s bottom line and are vital for finance professionals to measure. But effectively tracking and acting on employee health findings means working closely with HR (which also underscores the significance of cross-departmental transparency and collaboration). Fortunately, modern FP&A platforms can make it easy for finance professionals to sync HR data with financial data to determine what the numbers mean for the business. Here are the most important metrics to include in an employee health dashboard: Employee Retention: It’s important to measure what percentage of employees stay with your company over a given period of time.  Headcount Budget versus Actuals: This metric helps business leaders understand whether or not the company is expanding at its projected pace.  Revenue per Employee: This is a good way to measure employee productivity and also helps finance and HR teams gauge how headcount is influencing the bottom line. Employee Survey Data: You can collect this data from employee engagement activities and surveys. This might include the percentage of employees who would recommend the company and/or express confidence in a company’s leadership. The savviest finance departments are likely to find a positive correlation between employee satisfaction and overall business performance.  Learn how WWF-Canada turned 2 hours of reporting into 2 seconds. Connecting the Dots for Financial Health From tracking the bottom line to evaluating customer satisfaction and employee happiness, a financial reporting dashboard can offer invaluable insights for the entire company.  While individual metrics might mean different things to different organizations, connecting the dots between the key drivers of a company’s health is critical to seeing its big financial picture. It doesn’t matter if you’re doing so with a financial performance dashboard in Excel or another platform, the goal remains the same. The right financial dashboard can be the window to more strategic, integrated and dynamic views of the business. And with the help of Vena, building and using an Excel-based financial dashboard has never been easier.  Build Effective Financial Dashboards With Vena's All-in-One Financial Reporting Solution      

Data drives business today. That probably doesn’t come as a surprise for anyone reading this. Over the past decade, more and more organizations have pursued the goal of becoming data driven. Still, many continue to struggle—looking for ways to extract meaningful and actionable insights from the increasing amounts of data that have become available to them. But having a way to connect and visualize data helps achieve meaning from it, making it easier to get to the insights that matter. And that’s where KPI dashboards come in. By activating and automating the right KPI dashboards, you can play an important role in helping your business become more data driven. But building a successful KPI dashboard means understanding your data and the most relevant key performance indicators (KPIs) for your business. Only by focusing on the KPIs that truly matter will you be able to set your organization up for success and turn your data into actionable insights. Thankfully, today’s improved access to operational data means it’s more possible than ever to identify, measure and visualize the leading indicators that truly matter—and build KPI dashboards that turn your data into results. 1 What is a KPI dashboard? 2 Assessing your data 3 Defining your KPIs 4 KPI best practices 5 Building your dashboards 6 What comes next? What Is a KPI Dashboard? Dashboards are a powerful data visualization tool used to track metrics and KPIs across your business—from financial and operational metrics to those that look at sales and marketing, HR and customer success. They communicate your performance against your strategies and values and track the ongoing health of your organization, pulling from multiple data sources to offer a single view. In doing so, dashboards help you leverage your data to drive your business forward, facilitate collaboration and transparency and communicate performance to your executive team and organization as a whole. All of that enables you to determine where your organization is and where it might be going, letting you develop useful insights around the metrics that matter. By showing those KPIs in real time, dashboards also let you stay on top of both leading indicators that demonstrate your company’s health and performance, as well as actual results—so that you can course correct as needed when you’re going down the wrong path. But while a large number of companies today use KPI dashboards in some form, creating them is just the start. Whether you get the insights you need will depend on how you’re using them, what they look like and the KPIs you’re choosing to follow. So how do you build a KPI dashboard that successfully helps you move towards your performance goals? You start by choosing the right KPIs. And that begins with data. Assessing Your Data Choosing the right metrics to follow is critical to your dashboard success. Your list of KPIs should be specific to your business goals and objectives and come from conversations with your team and any other stakeholders involved. Ideally, your KPIs will link your organization’s strategy and goals with the people and processes you have in place. The best KPIs will also be built on timely, accessible and accurate data. And with the advent of data technology and analytics, finance teams today can access and measure KPIs in a way they never have before. After all, since you’ll have more access to data, you’ll be able to pick from a better array of KPIs. Modern data science and data warehousing mean more information to work off of and better points of comparison by which to judge performance. Business intelligence and new data strategies also make it possible to dive deeper to get to more attuned insights and to present your results using superior reporting. All of which contribute to better-informed decision making. And if you don’t have the data you need today, there’s no reason to think you won’t have it in the future. Identifying your gaps is still a step forward and a way of building transparency on where your data may be lacking—and where it might be improved with some investment of resources. That’s an important step too, leaving you with more insight into how to create visibility into your blindspots. Defining Your KPIs With so much data available, you may have more KPIs to choose from, but you still only want to focus on those most relevant to your organization. When narrowing down the field and defining your KPIs, consider two questions: What insights will move your business forward? The KPIs that you choose will be the ones you’ll want to measure and learn from—which means you should choose the metrics that will best help your business reach its goals. When identifying your KPIs, consider what you already know (your “known knowns”) and want to dig into further, as well as what you recognize you don’t know (your “known unknowns”) and want to better understand. But keep in mind that the very best KPI dashboards will also offer intelligence and frame your data so that you can ask questions of them and keep your fingers on the pulse, in order to identify your “unknown unknowns”—the things you don’t even know you don’t know—and let you stay proactive. Who should be seeing those insights? Your KPIs will also be tailored to the audience that will use your dashboards—whether that’s your immediate financial team, your executives or some other group. While your KPIs will be unique to your industry and organization, some popular financial and operational KPIs include the following: Popular Financial KPIs Popular Operational KPIs Operating cash flow Units sold/customer count Operating expense New and recurring revenue Current ratio Transactions (quantity, average value, frequency) Net profit margin Product line profitability Net profit or EBITDA Employee satisfaction Working capital Employee turnover Receivables and payables aging Revenue growth Inventory health Sales by region/team member Sales growth Brand exposure/impressions Return on investment Return on ad spend Hone your list so that it’s right for your specific business and audience. You’ll also want to make sure everyone has a clear definition of each KPI and your objective in measuring it. KPI Best Practices When defining your KPIs, there are a few more best practices to keep in mind: Always include a comparison point. You need something you can measure against—whether it’s past performance or something else. If there’s no comparison available, it’s not going to work as a KPI. After all, if you can’t measure it against something, what’s the use of following it in the first place? Have some variety. Try to assemble a mix of strategic and tactical KPIs, operational and financial KPIs and present- and future-facing KPIs—sales orders placed versus pipeline performance, for instance—to help you get a full view of your organizational health and performance. Don’t go overboard. Choosing too many KPIs makes it difficult to keep an eye on any one too closely—making your KPI dashboards less effective. While there’s no “right” number of KPIs to keep up with, between five and 20 is considered the sweet spot by many CFOs. Once you’ve got your list of KPIs, building a dashboard is about telling a data-driven story around them—turning data into insights in a way that’s easy to follow and turn into action. (Check out The Ultimate Guide to Financial Reporting to help you better understand your company's financial performance.) Building Your Dashboards The best dashboards not only talk in a language your target audience understands, but communicate in real time to let you make decisions in the moment. And all of that should be easy to use, engaging and accessible to your stakeholders—because if it’s difficult to access the insights on offer, nobody’s going to bother. So how do you build dashboards that get noticed? Here’s a step by step: Step 1: Gather your data. This will likely involve different data strategies and services to access the sources you need, as well as the implementation of automation tools and working with team members to ensure you’re implementing the right data for your list of KPIs. You may also need to scrub your data to get to what matters so you can build out better data visualizations. Step 2: Map out your data. Understanding how your data feeds into each KPI will be key to understanding whether you have all of the information you need to measure the metrics that matter—and will let you ensure you’re measuring each metric correctly. Step 3: Choose your technology. You’ll want a tool that displays your dashboards in a way that’s visual and dynamic so that you’re engaging even those outside your immediate team. The technology you choose should give you a big picture view of performance, preferably in a single view, while letting you drill down into greater detail to find out more about specific metrics when you choose to and ultimately to easily look at the raw data itself. Step 4: Build your dashboards. With your KPIs defined, the data to support them in place and your technology set, everything is ready to build out your dashboards. When doing so, always keep in mind the goals you hope to achieve and the audience you’re catering to, as well as the information you want to display. While there are commonalities among dashboard styles—a four-quadrant dashboard, for instance, is a popular choice—every dashboard should be unique and designed specifically with those factors in mind. Here are three examples of dashboards you can consider building to boost your financial reporting. But the work doesn’t stop once your dashboards are built—there’s still more you can do to ensure you’re getting everything you can from them. What Comes Next? Even when your dashboard is done, it’s not really done. To achieve your best results, you’ll want to continue optimizing and improving it, to ensure you’re telling the best possible story and getting to the insights that will actually improve your business. To accomplish this, consider the following: Get feedback. For a dashboard to be successful all your stakeholders need to want to use it. To ensure that’s the case, go straight to the source and ask everyone involved for their feedback—then make tweaks as necessary based on their response. Deploy and distribute. Keep your dashboards visible so that everyone involved has an ongoing view of performance. Whether you email your results in report form, offer direct access to your dashboards or keep them on display in a public place, you’ll want to make sure all of those relevant stakeholders stay in the know. That way everyone will be working towards the same goals—and know where you stand in achieving them. Actually use them. This may seem like a no-brainer, but it’s not unusual for organizations to fall into the trap of creating dashboards but never using them, then wondering why their dashboard efforts proved so ineffective. To see results, you need to integrate your dashboards into the way you work as an organization—bringing them out in meetings, company reviews, etc. The more you’re speaking from a single source of truth, the more value your dashboards will offer. Keep innovating. New machine learning technology and predictive algorithms are introducing fresh opportunities for next-level dashboards that look ahead as well as back, with predictive and prescriptive indicators that promise to give a clearer view into future performance. Technologies like these promise to add new insights to your dashboards and keep you ahead of the crowd—so don’t be afraid to test them out and add new innovations when appropriate, to constantly aim for better results. Finally, as you move forward, keep an eye on the KPIs you’re looking at and always ask yourself whether they’re still the right metrics to tell your story. If they’re no longer effective in helping you meet your goals, it may be time to reevaluate and replace them—and start building new dashboards around your new goals. After all, evaluating your dashboards is just another form of measurement in itself—and part of being a successful data-driven business. loading="lazy" Bring financial data to life with Vena’s reporting Vena automates financial reporting processes to help you collect and analyze your data to make smart, data-driven business decisions.

In today’s ever-changing business environment, there’s no time to guess what’s right for your business. Knowledge is power and that’s why having access to the right information is critical for faster, data-driven decision making across your organization. But according to survey results published in the recent 2020 Vena Industry Benchmark Report, it seems a majority of businesses are still not providing stakeholders with key data at their fingertips in order to make better business decisions for today and tomorrow. When 350 global business leaders from a variety of industries were surveyed for the report and asked about investments made in data and data-driven decisions, 55% had not purchased, nor were actively using a business intelligence (BI) tool. This means most finance professionals are still spending a lot of time gathering data and organizing it rather than focusing on the stories behind the numbers to make more informed decisions and help navigate businesses through change. What Is a Business Intelligence Tool? A business intelligence tool, as the name implies, is a tool that helps you analyze your data so you can make smarter business decisions. It’s like converting your data into a constant business review—discovering your company’s successes, setbacks and areas for improvement—so your team can make smarter and faster decisions that benefit the overall organization. Consider BI the essential tool to have in your finance team’s toolbox so they can spend less time looking for the data they need and spending all that extra time gained being the data analyst experts you need them to be for your business. Benefits of Business Intelligence Tools for Finance Professionals When your business is not able to adapt to rapidly evolving market conditions fast enough, there’s a lot at stake for your company. But without quick access to relevant data across your company in one centralized location, your team is left making business decisions on guesswork rather than on what’s best for your organization, putting your overall business at risk. An easy-to-use BI tool will help automate your budgeting, planning and forecasting processes and integrate your data into a single source of truth. It will also support descriptive and predictive data analytics within your organization, eliminate the guesswork in decision making and minimize potential risks for your business. Once your team is equipped with accurate and up-to-date information, they’ll be inspired to dive deeper into the numbers, identify business trends and turn operational data into real-time, company-wide insights that are actionable and that will help move the business forward. BI capabilities will also give your company a competitive advantage, enabling your team to create at-a-glance, pixel-perfect dashboards and data visualizations in minutes to give your data more meaning. When you can easily tell your financial reporting story using engaging, interactive visuals, your team will be able to collaborate on—and further share insights that were garnered from ad hoc analysis and reporting—and take appropriate action in decision making. With all this data at hand and with a clearer understanding of what’s working and what’s not in your business, you and your team can spend more time doing what you do best—charting your company’s journey to growth. A BI solution will help you and your business stakeholders determine the best routes moving forward. Learn how Vena can help you accelerate your budgeting and forecasting processes. Download Vena’s 2020 Industry Benchmark Report here.

Data drives modern business. It provides a foundation of information that lets your finance team look back at what your organization has already done, better understand what’s happening in the moment and see forward into what’s ahead. In doing so, it allows you to analyze what’s working and to understand what’s not. So what happens when your data becomes a hindrance rather than a help? Whether you’re having problems sourcing the right data or converting it into useful insights, spending too much time organizing data or haven’t built the right technology infrastructure around it, data challenges can lead to greater issues across your finance team, making it hard for you to deliver value to the organization as a whole. And that can have a negative impact on your business, leading to weak insights, untimely reporting, failed processes and decreased productivity. All of which are hard to compensate for during times of change when you require as much visibility as possible to build the right strategy to thrive. In the recently released Vena Q2-2020 Industry Benchmark Report, we asked 350 business leaders and finance and operations professionals from across industries and around the globe to identify their biggest data challenges. Here’s what we found—listed in order of most challenging to least: Multiple disparate and disconnected data Too much time wrangling data Getting meaningful and actionable insights Lack of data expertise Too much data Consider each in turn. Challenge #1: Multiple disparate and disconnected data Multiple disparate and disconnected data was the most common data challenge for organizations, as revealed in our benchmark report. Identified by 57% of respondents as a challenge, it’s proof that data is only good to you if you can get to it and use it in a meaningful way. This means connecting data that comes in different formats and from different data sources to create a unified view and one single version of the truth. From there, you can then draw on it to build your business processes, fuel data-driven storytelling and navigate your business through change. It will also help you make decisions on an ad hoc basis and react with agility at every step. This is where the right technology comes in as well, connecting data and putting it at your fingertips so you can begin to extract true insight and even create a framework for tools such as machine learning and AI. Challenge #2: Too much time wrangling data The second biggest data challenge among survey respondents? The amount of time spent wrangling data. Of the organizations surveyed, 51.5% named this as an issue. And it’s no wonder. Manually gathering, selecting, cleaning and organizing data so that you can turn it into actionable insights can be an unruly and time-consuming process. Again, here’s where aligning data across disparate data sources and creating a single source of truth makes that data easier to access so that it’s fully transparent and easier to put to use. It's also a critical step in getting true value from your data by removing any barriers so that you’re able to get to those insights faster, increase the agility of your planning process and better prepare for change. Challenge #3: Getting meaningful and actionable insights Raw and clean data means nothing if you can’t turn it into meaningful and actionable insights. Yet 48.5% of organizations have issues doing exactly that. That means almost half of businesses aren’t using data to its fullest potential to enable the strategic information needed to drive data-driven decision making and plan for today and tomorrow. To drive strategic growth within organizations, finance teams can draw on technology to access information needed. The right business intelligence tools will turn that data into actionable insights in order to build and support data-driven decision making. By doing so, you can bring in processes that will lead to better strategy and growth, so that you leverage your data to feed insights and drive efficient and productive processes that align with your organization’s greater strategy and goals. Challenge #4: Lack of data expertise Accessing data and putting it into action relies on the right technology and processes, but it’s people-driven too. Your people need to be able to create true data-driven processes. And since 41% of organizations named a lack of data expertise as a key challenge, it’s clear many still don’t have that organization-wide knowledge in place. Yet creating a business-wide team of data experts is a key step to organizational agility and success. Building a data-driven business with organization-wide expertise requires data transparency and the ability to use data easily to write reports, create dashboards and establish a data dictionary that everybody can put into action. To reinforce this, you’ll need ways of visualizing data in a way that will communicate insights and enable strategy and growth. Challenge #5: Too much data Is there ever such a thing as too much data? While it wasn’t a challenge for most of our survey respondents, almost a quarter are clearly struggling, with 22% of organizations seeing it as a challenge. The challenge of too much data, though, can often be a symptom of another issue—inefficient technology, maybe, or the problem of prioritizing data quantity over data quality. It may also be a byproduct of one of the other challenges listed above. But too much data can also be a sign that you don’t have the right people focused on it. In order to keep on top of your data, you need a team that brings a range of skillsets to the table and that’s equipped to organize that data and extract the insights you need. Your team should also collaborate with other departments to put those insights into action and to identify the best metrics and align on them across the business. If you don’t have executive support to expand your data-driven processes or the team that oversees them, the amount of data you’re trying to coordinate and draw from can of course feel overwhelming. Or maybe there’s pressure from above to expand your data-driven processes without the resources to act on it. Either way, solving the people issue and getting that executive alignment is critical to succeeding and using data to help your organization thrive. Other Data Challenges Finally, a small cohort—only 5% of organizations—identified “other” in the list of key data challenges. Identifying what those data problems are will help you create a plan to handle them—and let you evolve your solutions across people, process and technology to overcome your data issues. After all, in today’s data-driven business environment, data challenges are business challenges—getting in the way of organizational growth and agility. Solving these challenges is critical to building effective strategy and planning processes. It’s also ongoing—just like the data is always changing, how you interact with it may as well, introducing new challenges and ways to optimize your processes along the way. But getting the most out of your data means staying on top of those challenges so that your organization can stay on top of business and market changes too. Download your free copy of the Vena Q2-2020 Industry Benchmark Report today, or find out more about Vena’s solutions for agile planning and reporting.

Market and business model changes can seem insurmountable—and planning with agility feels difficult when that change is looming. So how do finance teams stay on top of it? When Vena surveyed 350 business leaders and finance and operations professionals for our recently released Q2-2020 Industry Benchmark Report, we wanted to find out exactly that. And there were some surprising conclusions. One of the most unexpected, though, was how unprepared many organizations are for change. Among the findings: more than half of organizations, at 56%, don’t have any kind of early warning system in place. But what does an early warning system involve and why is it important? And what do you need to consider as you introduce one to your business? This blog post will cover: What is an early warning system? Why is having an early warning system important? Examples of leading and lagging indicators. Operational vs. financial reviews. Early warning systems in practice. What Is an Early Warning System? An early warning system is a set of data and processes that gives you insight into the market and business forces happening around you. It provides you with ongoing, ever-evolving early warning signals that let you evaluate your plan in the wake of those forces, to determine whether you’re still on the path to achieving your mission, or if you need to make adjustments to course correct. It also helps you identify whether changes are a product of oversights in your plan or bigger market forces—and whether those market forces are temporary hurdles you need to overcome or more permanent shifts that need more attention. Why Is Having an Early Warning System Important? As a financial professional, an early warning system can help you get on top of change before it significantly impacts your business, to align your team and data early and make shifts as necessary. It involves regular reviews of leading and lagging indicators and identifies your organization’s vulnerabilities to build agility and resilience into your planning process. By putting a standardized process in place, it lets you stay ready for change—and gives you the tools you need to deal with it when it inevitably arrives. Examples of Leading and Lagging Indicators Leading and lagging indicators are key to an early warning system and can help you better understand your business and the market around it—both where it’s been and where it’s going. By identifying the leading and lagging indicators important to your business and watching them closely, you’ll be able to act with more agility and determine your best response early while you still have time to plan and the room to make adjustments as needed. They each play a different role: Leading indicators are those KPIs or metrics that are most likely to change before any large-scale market or business changes happen. They can be used to demonstrate future trends before any financial output of business shifts become evident and inform course corrections early. While leading indicators aren’t 100% accurate, they’re critical to any kind of early warning system. Examples might include traffic, demand, website visits, impressions or trending hashtags. Customer or employee satisfaction—as predictors of customer loyalty and retention or company performance and turnover—can also be leading indicators. Together, these types of metrics can give you a picture of what the future might hold.   Lagging indicators, meanwhile, are the opposite. Otherwise known as trailing indicators, they’re like a rearview mirror looking back at where you’ve already been. That may not seem as critical to an early warning system meant to predict change, until you realize that you don’t—and can’t—get everything right all the time. Sometimes plans go wrong and having an eye on the past lets you understand whether you achieved the results you were looking for—and if not, why. All of which helps you prepare for the future and build a better plan. Lagging indicators might include revenue, profit and growth. And since those are things you’re already measuring and comparing with others in your industry, it’s not much of a leap to start looking at where you’re faltering to determine where you’re most vulnerable to change. Together, leading and lagging indicators provide a picture of your company and how it fits into the market around it as well as the trends emerging around the corner. In doing so, they help you recognize where your business might be affected so that you’re ready to roll with any changes. But for that to happen, you need ways to review, understand and deal with those new changes with agility and confidence, along with a regular process that keeps the entire idea of change top of mind. Operational vs. Financial Reviews Change has a way of sneaking up on you if you aren’t keeping a close enough eye on it. This is why regular operational and financial reviews are also critical to an effective early warning system. Through monthly or even weekly reviews—with up-to-date dashboards that help you share and visualize the metrics you’re looking at—you’ll be able to stay on top of new trends and identify how your business may be vulnerable to them. You’ll also be able to keep key stakeholders informed and on board with your plans. Operational reviews allow you to look at the bigger picture business concerns around your operating procedures, product or service operating margins, product profitability, communication and so on. This type of review will help you identify yellow and red flags related to lagging and leading indicators, such as customer and employee satisfaction, product pipeline or brand recognition. Operational data can be especially effective in providing early warning signals, offering a view into future sales and revenue.   Financial reviews, on the other hand, consider such things as profit and loss as well as budgets and forecasting. They also look at lagging indicators that include revenue and growth. This is where you might also consider market indicators—for instance, stock market performance, currency strength or unemployment numbers—and how they might affect your business. The right processes—including scenario modeling—can help you plug all of those metrics in to see what the future could hold and how well you’re situated to navigate any changes ahead. A Plan For Changing Course Understanding leading and lagging indicators isn’t enough if you don’t have the processes in place to leverage those indicators and create a plan around them. That starts with scenario modeling. While Vena’s benchmark report shows that 40% of organizations aren’t using scenario modeling, it’s a powerful way to plug in the trends you’ve identified to see what your organization’s possible futures might look like in the face of them. By putting those possible futures together with your actual past—the rearview mirror view your lagging indicators offer—you’ll be able to get a full understanding of how future scenarios might affect your organization as a whole and how to make the adjustments you need to thrive. Identifying any necessary plan adjustments or decisions that need to be made will also require agile planning processes such as cash flow management and agile forecasting. It also involves a solid foundation of data—and the power of data-driven storytelling—every step of the way. By incorporating an early warning system and making it a systemic, repeatable and leaned upon way of doing business, you ensure you’re always ready for what’s ahead and also prepared to react quickly to whatever happens. While change may seem unpredictable and impossible to handle, it’s not insurmountable. With an early warning system, it becomes just another part of doing business—and one more thing the finance team is empowered to navigate as you lead your organization today and into tomorrow. Download your free copy of the Vena Q2-2020 Industry Benchmark Report today, and find out how you can turn your data into a direction with Vena agile planning.

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 reporting connects 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. (Check out The Ultimate Guide to Corporate Budgeting to help you better put finance at the heart of everything your company hopes to achieve.) Telling a Data-Driven Story Survey data from 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 means sourcing 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’s enough cash flow to 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.   Learn more about how you can quickly get started with best practices for agile reporting, or talk to an Vena FP&A expert 1:1 with no obligation to help you plan for today and tomorrow.

Don’t just focus on getting the numbers right — transformative CFOs turn rows and columns into a visual story that lasts Not long ago, I spent almost an entire day formatting — then reformatting — an internal management report that I hated. It wasn’t a problem with the numbers or other data in the report. It was how it looked. There was no clear thought put into to user experience (UX) design, no thought to aesthetics or anything of that nature. It was ugly – and probably not far off the reports that come out of too many finance departments. Of course, the main purpose of any financial report lies in its ability is to convey insights that drive company action. To the best finance professionals, the numbers should paint a picture, tell a story. A good example comes in Shoe Dog, a memoir by Nike Inc. founder Phil Knight, who recalls his early days as an accountant at Price Waterhouse and a manager with a gift for analytics: “In a column of otherwise spectacular fours and nines and twos, he could discern the raw elements of Beauty. He looked at numbers the way the poet looks at clouds, the way a geologist looks at rocks. He could draw from them rhapsodic song, demotic truths. Day after day I watched Hayes do something I’d never thought possible: He made accounting an art.” There’s just one problem: it’s no longer just accountants who have to look closely at those reports. Transformative CFOs work hard to not only distill information but to collaborate with a wide range of planning stakeholders across the organization. That means they have to make sure the full story behind the data is reflected in the beauty of their presentation – everything from annual reports to monthly management updates. In The Importance of Data Visualization in FP&A, Innovation Enterprise editor James Ovenden gave a good business case for why this is so important: “Visualization reveals intricate structures in data that cannot be absorbed in any other way, and storytelling with data visualization draws an impactful response from the user and reinforces it with numerical evidence,” he said. “It means that problems can be spotted faster, and solutions implemented as early as possible. Data visualization also means that you have one central source of truth for information that can be viewed across the entire organization, with all employees able to interrogate and interact with the data.” This doesn’t have to be a painful or laborious process at all, but it does require consideration, planning and the right reporting tools. These are a few of the ways I’d recommend to make beauty a standard requirement in your reporting: 1. Think Through the Goals Behind the Report Finance departments have traditionally focused on the accuracy of the numbers and KPIs in their reports, not on their beauty. Sharing numbers you can trust is still Job Number 1, but transformative CFOs and their teams also take the time to imagine what CEOs and other executives do with those reports. Do you want your report to: Help accelerate decision-making around an important business issue? Reflect trends about customers, the market, or the culture of your organization? Deepen the understanding of a complex problem and illustrating ways to overcome it? Some financial reporting may include these elements and more, but you get the point. Much as you would choose your wardrobe carefully when you’re getting ready to present to your board, beautifying financial reporting starts by knowing exactly what kind of impression you want to make, what kind of story you want to tell. 2. Learn From the Best Unlike an artist starting with a blank canvas, CFOs and their teams don’t have to create each report from scratch. There are countless examples online that can offer inspiration, ideas and best practices you can start using for your reporting today. This post from Column Five Media for example, offers a curated selection of 40 different companies’ annual reports, showcasing an arresting use of colors, photography and other elements. Their conclusion?   “Regardless of your brand, product, or service, your annual report is always an opportunity to engage and connect with your audience, whether it’s stakeholders, employees, or customers. Look for opportunities to showcase great design at every touchpoint, and you’ll keep your audience’s attention,” the authors said. Of course, annual reports may get more attention from marketing departments and design agencies than the everyday reporting the finance team does, but the same principles hold true. For some other great examples, check out this post from Forbes featuring more numbers-oriented reports from Shopify, Mailchimp, Kickstarter and more. 3. Pick Your Presentation Options Carefully CGMA Magazine and KMPG recently worked together on a primer about financial reporting design that suggested exploring all the possible approaches to tell a story with numbers before the storytelling actually begins. If you know what you want the numbers to convey and the audience you’re going to reach, there are plenty of ways to make the data more dynamic. Knowing the story you want the numbers to tell will help you determine the best way to present them. “Options include dashboards, line charts, mapping charts, and bar or pie charts. Bridges, also known as waterfall charts, are well-suited to depict variance analysis as the steps in the bridge are to scale, so the viewer’s eye is naturally drawn to the most significant movements first,” the article said. “The positioning, colors, and scaling of the visualization tool you choose are important aspects. Opt for clean, sharp contrasting colors. Place your key message in the top left-hand corner of the page or screen, as this is the area the reader notices first.” Of course, reports may not merely be printed but viewed on laptops, tablets or even smartphones, all of which have their own design possibilities — and constraints — you need to take into account. 4. Know What to Show — And What to Leave Out The only complaint you’re likely to hear more than a report being too long or dull is one that’s too busy. Overloading reports is easy to do when you’re trying to offer a rich, informative design experience, and trying to tell the full story behind your numbers. Upslide, a company which offers tools to make charts within Excel, offers some great tips in an article on its blog. It’s worth looking at how they discuss these best practices in detail, but some of the pointers include: Pick the right chart type — bar graphs don’t always work, and neither do pie charts. Remove unnecessary axes — the human eye can only take in so much. Less is more. Distribute bars evenly — there’s nothing more amateurish than reports that mess this up. Remove background lines — if you don’t need them, they shouldn’t be there. Remove unnecessary styling — only use what will really make an impact. 5. Guide Your Audience Through the Answers They’re After This may sound obvious, but standardized financial statements and old habits make it easy to overlook. Based on your experience interacting with your CEO, executive or board, what are the most common questions you’re likely to get when you deliver a report? Do they want to know your performance compared to forecast? Or who the top (and bottom) performing sales reps are? Anticipate these questions and design your reports accordingly. Make effective use of bubbles, colors or other design elements to proactively drive your audience towards the details they’ll want to see first. In an article in the Harvard Business Review author Nancy Duarte helps build on this theme:                                      “When delivering a presentation, show the conclusions you’ve drawn, not all the details that led you to those conclusions,” she writes. “People won’t have time to chew on a lot of complex information, and they’re not likely to run up to the wall for a closer look at the numbers. So, think in broad strokes when you’re putting your charts together: What’s the overall trend you’re highlighting? What’s the most striking comparison you’re making? Those are the sorts of questions to answer with projected data.” 6. Uncover Deeper Insights with Non-Financial Data Financial reporting should never exist in a vacuum. It should be developed with an eye towards metrics and KPIs that tell the full story and drive decisions that affect your entire organization. An article on TechTarget shows how data visualization can bring disparate sources together to find new meaning, like combining operational data from a call center with traditional financial reporting data: A company can drill down into one of those categories — using any number of graphical representations, including geographical maps, heat maps, paths and scatter graphs — to gather information that will help their leaders make decisions. Do they need to allocate resources differently? Do they need to establish a cost-cutting initiative or a productivity initiative? 7. Run a Sneak Preview You know how major movie studios will hold advance screenings to gather feedback from audiences long before an official release? They understand the importance of making sure people will connect with and respond to what’s being shown up on the screen. It should be no different for finance professionals. As Mike Monroe suggested on the Washington Technology Industry Association blog, there is usually at least one or two people in the organization who could be a bellwether for how a report will go over with others: I highly recommend peer or “lowest common dominator” data reviews prior to release.  If a person with limited background that is unfamiliar with the data can quickly come up with the message/conclusion from review of the analysis, then you know you are on the right track. Conversely, if the reviewer gets confused, overwhelmed or has the wrong takeaway, you will likely have to rethink your work. It might be good to turn to someone outside of finance for something like this — it could be a coworker or peer in sales, marketing or even IT. Over time, you’ll begin to learn from them what works and what doesn’t. 8. Use Analytics to Add More Substance Behind the Style Yes, a picture is worth a thousand words, but beautiful financial reporting is even more valuable when it provides guidance – predictive and prescriptive – on the future of your organization and how to get there. Numerous technologies exist to improve the way finance departments not only crunch the numbers and make sense of them, but what they say about the future of your business. This article on Accounting Today argues that data visualization is critical for areas like internal audit, but not without better analytics under the hood. It quotes research from Deloitte where 86 percent of the chief audit executives said they use analytics but only 24 percent employ analytics at an intermediate level and seven percent at an advanced level. In short, it’s still early days for predictive analytics in financial reporting, but that presents a great opportunity for you to be an analytics pioneer in your organization – if not setting standards for your industry. Summing Up with SUCCESS I remember a manufacturing client where the CFO loved the reports we developed. He said he believed the numbers were accurate in part because of the way the report was formatted. Think about that for a second. For at least some of your audience, the look and feel, the formatting and indeed the beauty of your reports will have a direct impact on how much they trust the numbers within. Every report recipient will have a different way of how they want to ingest information, but they’ll always appreciate an effort to make the experience easier, more engaging and memorable. Some will only want to see the big picture and high-level takeaways.  Others will want to drill down much deeper into cause/effect and correlations with a variety of other factors. Along with building their analytical capabilities, the quest to improve the visualization and presentation of data may wind up influencing the kind of skills for which transformative CFOs want to hire, and the way they develop their own talents. On CPA Now, self-confessed “numbers nerd” Timothy Dinan talks about how he turned to the International Business Communications Standard to learn seven rules for conveying complex ideas through visualization. The concepts include “say, unify, condense, check, express, simplify and structure.” In other words, SUCCESS. “I believe the CPA profession, for whatever reason, has a tendency to drop the ball when it comes to the communication aspect of the data,” he writes. “The inclination is to just send the data and assume the reader will understand it. This is a terrible assumption.” Your audience may never say thank you for a beautiful financial report. But if you do it right, they’ll almost certainly consider the work you and your team do as more important, more influential and worth more attention. For anyone striving to become a transformative CFO, that could be the most beautiful thing of all.

If you don't have confidence in your final numbers or underlying processes, your plans aren't going to be informed….but you're not alone. Clench your stomach muscles. Take a deep breath, and hold it. Cast your eyes down so no one can see the expression on your face. Just keep moving, and with luck it will all be over soon.  This is what might happen to your body when you doubt yourself, and it’s particularly bad when you’re doubting the work for which you are directly responsible and accountable. For CFOs, that work can be as broad as the strategic insight they bring to the company’s direction, or as specific as the budget numbers on which those insights are based. Either way, a lack of confidence in your numbers isn’t just bad for the CFO, or even the finance department. It affects your entire organization.  When you can’t trust the numbers, you can’t reliably act on them. And a large portion of CFOs are in the middle of a gap between their budgets and the truth.  Trusted Numbers Essential to Success For proof that this gap exists, you only need to look at a Financial Close Benchmark Report from financial software firm Adra Match. The survey of CFOs, controllers and other finance professionals found a stunning 72 per cent don’t trust the numbers they report after closing the books.  Or in March, the FSN Modern Finance Forum released a report, The Future of Financial Reporting, in which 40 per cent of CFOs suggested that their data isn’t trustworthy and accurate. Perhaps as a result, 55 per cent of CFOs said they worry that controls aren’t operating as they should.  At the same time, the perceived value of trustworthy data and its ability to drive meaningful change has never been greater. Just look at CGMA Magazine, which recently published the results of a survey by SAP and Oxford Economics with representatives of 1,500 companies around the world. Seventy-three per cent of respondents were CFOs, and there was no question that accurate numbers and corporate success went hand-in-hand.  “In those companies whose revenues rose by more than five per cent during the past year, 83 per cent of respondents reported that their finance function’s influence and visibility have increased across the organization,” the article said. “Real-time analytics (used to drive strategic growth initiatives) was deemed critically important or very important to the finance function’s performance by 83 per cent of industry leaders, compared with 45 percent of non-leaders.” Trusted Budgets Behind Great Customer Experiences Trusting your numbers isn’t just important to ensure a company can meet its payroll or cover office expenditures. In fact, as CFOs continue to reshape their role from cost manager to strategic leader, they are trying to marshal the resources necessary to do things that used to be the almost sole purview of departments like sales and marketing.  As CFO Magazine reported, a Forrester study published in July showed 89 per cent of financial leaders are prioritizing changes that will improve customer experiences. That means everything from how a company’s web site is designed to the training of call center staff or, in the case of retail, how stores are designed.  There’s just one problem: they don’t have the best information to confidently bankroll those kinds of initiatives. As the article shows, delivering a great customer experience first requires finance leaders overcome challenges to getting the right, trusted data:  “Roughly a third of CFOs pointed to a lack of data integration (35 per cent) or to organizational silos that make it difficult to get needed insights from other business stakeholders (37 per cent). Further, about one in five (22 per cent) of the participants said they are hampered by organization-wide inconsistency in the methods used to calculate and assess KPIs.” Trusted Foresight Mitigates Risk To some organizations, of course, improving the customer experience feels like a dream project compared to putting out the day-to-day fires that threaten their growth — or even their long-term existence.  CFO Innovation, for instance, assessed the results of a study by the Financial Executives Research Foundation, where 24 per cent of financial professionals said they don’t see significant changes and unknown threats to the business until it is too late. These changes could include shrinking profit margins, hidden costs in equipment or other purchases, or outdated details about customer churn rates.  “The level and speed of disruptive risk is providing a challenge for executive teams to recognize the sources of disruption and how it will drive potential risk and opportunities for the company,” Mark Frigo, CPA, CGMA, professor of strategy and leadership at DePaul University in the U.S., told the publication.  Ultimately, CIO Innovation said, “sharing the data, rather than just sharing conclusions, helps others in the organization understand the analysis and why managing identified risks is important to them.”  Sounds great — unless the data is dubious.  The Path to Trust Goes Through Technology If you ask the experts how best to get out of this mess, the answer is pretty consistent: marry the knowledge and expertise about financial data from the CFO’s team with the knowledge and expertise about emerging technology from the IT department and outside vendors.  In ‘Successful CFOs Collaborate, Not Isolate,” for instance, Financial Director focused on a different aspect of that SAP/Oxford Economics study. Its editors noticed that 87 per cent of respondents with company revenue growth between 5.1 and 10 per cent said finance departments collaborate regularly with IT. By contrast, companies with slower revenue growth were 22 points behind in finance/IT collaboration, at only 65 per cent.  Why is this such a big deal? Because ensuring data is accurate will mean double-checking across a range of different sources, which in turn will require the kind of integration across systems that only technology can deliver.  A hint of what this will look like was discussed in an op-ed on Bizcommunity, where the author predicted automation will create a sea change in how finance departments prepare their budgets:  “To collect, store and analyze these vast caches of data, the CFO of tomorrow will naturally look to cloud solutions. Cloud-based ERP, EPM and SCM applications can act as the ‘muscles’ of a data-driven, digital approach to business transformation, providing CFOs with the tools to optimize business performance, collaborate, and allocate resources effectively.” Of course, working with IT or tech vendors on automation and integration isn’t a one-way street. It will require CFOs and their staff to provide critical advice on other necessary features such as an audit trail, version control and workflow to provide that single source of the truth. Accuracy + Trust = Leadership The quest to close the budget-trust gap is not just a matter of CFOs trying to save their jobs. And it’s not necessarily just about helping their organization avoid risks or create better customer experiences. Making accuracy – and trust – a priority is the hallmark of being a responsible steward. You know, people like Helen Bowman.  Who? The finance leader at Drexel University was among those recently honored by the Philadelphia Business Journal in its 2017 CFO of the Year Awards. In reflecting on her win, Bowman suggested that business ethics really begin with the chief financial officer — or at least they should.  “There is a strong effort among many companies to go beyond compliance, to do, not just the legal thing, but the right thing,” she said. “The CFO plays a huge role in that.”  It’s not just about occupying the role, however. It’s about taking the steps necessary to ensure that the finance department — and all those connected to it — can work with data that holds up to scrutiny. Data that can be counted on when tough choices have to be made. Data that leads to outcomes that not only reflect on the CFO, but the entire organization the CFO supports.  This is the data that should be in every budget, forecast, plan or report — you can’t afford to strive for anything less. 

Quote by Christopher Lah, Revenue Cycle Senior Director at Cincinnati Children’s Hospital: Putting the right information into one place should enable better decision-making, but first you need to avoid the most common design traps. If you’re driving a car, you probably only glance at the dashboard every now and then — you know, to check your speed vs. the speed limit, to make sure you have enough gas and so on. No one expects the dashboard to tell you how to actually drive. Financial dashboards are no different. Or at least, they shouldn’t be. According to a professor of analytics writing in the Harvard Business Review, however, dashboards can be full of potential traps that ensnare unsuspecting executives. These include what he calls the “importance trap” (that IT or others in the organization design the dashboard based on what they believe is important information), the “context trap” where we fail to look beyond the numbers, and the “causality trap” where we make superficial conclusions based on a dashboard. The overall problem is summed up as follows: “Moving from description to prediction to action requires knowledge of how the underlying data was generated, a deep understanding of the business context, and exceptional critical thinking skills … The simplicity and elegance can tempt managers to forget about the all-important nuances of data-driven decision making.” Download: Vena Web Dashboards Datasheet Where Analysis Begins Some of these traps could be avoided as dashboards become more mature and common in the enterprise, of course. It’s worth keeping them all in mind as they are designed or evolve in a particular organization, especially the notion that dashboards are a starting point for analysis. A piece about dashboards on Smart Data Collective provides some helpful examples of how the journey to data-driven decision making should unfold: “If your dashboard displays product returns, it should also let the user drill down and see where products are being returned, reasons for the return, and any other pertinent information,” the article says. “An effective dashboard starts with a high-level view, and provides drill-down capabilities.” Beyond the capabilities in the dashboard itself, a key element is who’s using the dashboard and how. That was one of the takeaways from a recent Q&A with Jason Gabauer, controller at real estate firm Halstatt on FEI Daily. “One of the constraints that you see is that someone looks at it and says, ‘Well we can’t do that because we did it in Excel and there’s no way to do that in the software.’ You have to have somebody that’s a change agent, that looks at everything a little bit different to put the dashboard together,” he said. Fortunately, it’s now a lot easier to continue working with Excel and actually make it a foundation for modern-day dashboards. That means more opportunity for change agents to focus on the data that’s really important, build in context and identify true causality in dashboards that make a big difference to the way decisions get made. The post How To Build Dashboards that Overcome the Doubters appeared first on Blog | Vena Voice | Vena Solutions.