Ever heard the saying “if it’s not captured it never happened”? This saying is generally applied in the context of Instagram and other social media platforms, but it is also relevant in the context of financial information.
Everything that is captured in the daily operation of your business sits in a database somewhere, in different formats, either structured or unstructured, and broken down into different pieces. That information is valuable and holds within it an untold story. A story that with the use of data analytics, will unlock the truth about what is really happening within that organisation.
A lot of the answers to the key questions that are asked when trying to understand more about a business lie in the data that they generate. We have all heard the buzz words “BIG DATA”, “DATA DRIVEN” and “DATA ANALYTICS”. They can be overwhelming and understanding what each of them mean and where to start can be confusing.
As a financial manager, Excel has most likely been a trusted companion throughout your financial career. However, as the amount of data being produced by organisations continues to increase year on year, there is a need for more sophisticated tools to take on the data processing and monitoring.
How to get started with data analytics
Identify your organisations pain points
Before you can start analysing the data, it is important to understand what it is that you would like to know or understand better about the organisation. Some examples of this include:
- Improved understanding of sales cycles for cashflow forecasting
- Reviewing of internal controls in Finance after a recent control failure
- Trend analysis of procurement data
- Accuracy of supplier or accounting data
2. Know your data and resources
There needs to be an understanding of the types of data that are available to be analysed; structured vs unstructured, the volume as well as the sophistication. Once you have a grasp of this you can then look at either making use of a dedicated data scientist, your IT or BI team, or if you are one of the lucky ones, use your data analytic tool that has been installed on your company’s server to analyse it all, making sure that all results are sound and reliable.
In today’s ever-changing competitive landscape, having access to the source data and the ability to process and analyse that data as valuable chunks allows for faster decision making, which gives you and your team a competitive edge. Often decisions are driven largely by gut-feelings or past experiences, which can be misleading and biased, even when they feel entirely convincing. By employing data analytics to improve the decision-making processes, obtaining real and unbiased data-driven insights will allow you make valuable business decisions supported by real data.
Even if it is only small changes in the beginning, making use of the meaningful data produced you’re your analysis can bring about positive changes to your organisation.