“The principle of mining data from processes and systems is becoming the ‘new normal’ for SSO operations” – SSON. Sometime back we conducted a webinar hosted by FCIB discussing how accounting data analytics can be used in global finance operations and in finance and accounting shared services centers.
We specifically discussed the application of analytics within the order-to-cash processes to gain global control and improve O2C cycle times and cash flow. It was interesting to find that more than 72% of the attendees had current data analytics initiatives in planning or in the works for the next 12-24 months.
This is not a surprise, considering that more than 90% of respondents of the 2015 Annual State of Shared Services Industry Report released recently by SSON, confirm that they are actively engaged in data analytics/business intelligence strategy. Finance leaders are quickly educating themselves on analytics skills and learning how to leverage these new technologies to leapfrog into the new age of data-driven finance management.
The top two drivers for these initiatives are improved business decision-making and identifying opportunities to reduce cost. However, the most popular reason to pursue data analytics is to identify areas for operational improvements.
As SSO’s expand beyond country (or even regional) boundaries to incorporate global processes, the access to enterprise data across various systems, both internal and external, increases exponentially. Those SSO’s that can manage their data and turn it into strategic assets will become more valuable to their businesses. They will go beyond delivering simple cost cutting benefits.
So how can F&A shared services leverage data analytics in their operations? Here are a few examples.
Data-Driven Insights for Processing Transformation with Accounting Analytics
Data-driven business insights will highlight where investments are needed to transform and improve processes, identify performance gaps to improve personnel management and uncover opportunities for new revenue growth. Executives and line level managers in shared services can better manage performance with dashboards and analytics.
Predictive Analytics for Seeing the Future
Don’t tell us what happened yesterday. Tell us what will happen next month and tell us how to take appropriate steps. Applying data analytics for better forecasting, visibility of cash flow, risk management, or for customer churn prediction and retention management will become a norm.
Prescriptive Analytics for Gaining Control
Based upon the data you have as well as trends identified, how should the business be planning for reacting to or pre-empting tomorrow’s environment? An example of how prescriptive analytics can apply is precisely recommending customized credit policies for customer acquisition at a very granular level to improve healthy revenue growth, customer retention and maximizing customer lifetime value.
Shared services managers and finance executives must become more technology proficient. Understanding how and why technology enables your SSO services becomes your responsibility. You’ll want to master these concepts to get the power of data analytics from your systems.
Understanding the risk associated with a build vs. buy philosophy of these new technologies is imperative. Leveraging packaged shared services analytics solutions like Emagia Analytics is a good way to get started for your shared services center and ride the data analytics wave. You will be amazed by the rapid Return-on-Investment data analytics can deliver.