CFO seeing the future

Seeing the Future: Proactive Analytics and the CFO

Seeing the Future

Can your business predict the future?

With new data analysis tools, CFOs are using predictive analytics to create profitable futures for their enterprises and playing unprecedented roles in strategic decision-making.

Women sitting infront of two monitors

Predicting the future has always been the holy grail for CFOs, who are tasked with maintaining their enterprises' financial health and carefully considering capital, strategy and innovation investments.

Decision-making in this context is moving through a period of transformation thanks to advanced technologies, including machine learning that can enable CFOs to see into the future with exceptional accuracy.

 

Reading Deloitte’s Analytical Advantage report reveals that 18% of CFOs have analytical oversight across their companies. And finance is often the area of an organisation that will invest in analytics. So, CFOs are in a unique position to shift their focus to become more active influencers in their businesses' overall strategic planning.

 

I believe the shift in the CFO's role is essential. CFOs have the knowledge and historical data to enable them to see into the future. Questions about innovation costs, supply chains, and workforce expansion continue to all come under their remit. The pandemic has taught every business that resilience against the unknown is now a critical foundation they must build their post-pandemic enterprises upon. From inventory to talent, the essential mission-critical components of a business must be protected. Here, the CFO, I think, has a pivotal role to play. Transforming data into insights that can guide a business into their prosperous futures needs a steward that understands how the components that make a business function can be optimised. The skillset CFOs have developed to ensure the financial health of their businesses can be applied to broader business strategy.

 

artificial intelligence

Machine Insight

Using digitally disruptive tools with clearly defined business goals is essential. The output CFOs can gain from any machine learning system is only as good as the data these outputs are based upon and the questions being asked. CFOs have experience in descriptive analytics that uses historical data to base their predictions upon. Shifting to a more predictive model will need, in some cases, larger datasets and better quality data.

 

The power that predictive analytics can deliver is to transform a business from being reactive to becoming proactive.

I have witnessed many business leaders who have constantly said that if they had known about the events that had a negative impact on their businesses, they could have reacted to mitigate the impact this event had. To be clear, no predictive analytic system is a complete and accurate window into the future, but what these systems can do is make robust predictions based on many factors. Again, the quality of the data these systems have available is paramount.

 

 

CFOs can’t afford to wait and react to trends as they mature. Instead, they must proactively monitor, experiment with, and exploit key data and analytics trends to respond to crises, innovate and rebuild.
Richard Ries, VP, Advisory, Gartner

Data-led insights are how CFOs will become the hub around which many business functions will orbit. Where CFOs and their teams had occupied a narrow and often blinkered position in their companies, today, CFOs synthesise business value from the insights they have gained.

Seeing the future

Seeing the Future

Future Advantage

The title of a report from Accenture, 'Unlocking Value with Analytics', encapsulates why CFOs must be using machine learning tools to enable them to evolve how they use analytics. Unlocking value within their data is vital for their businesses' future prosperity.
 

Accenture concludes: “Twenty years ago, CFOs were rarely thought of as stewards of value creation and developers of business insights. In the face of rapid technological evolution, the CFO's role has also evolved.”

Using active intelligence is a tool CFOs can use to unlock the value and insights that are often hidden in the vast datasets their enterprises have amassed. Here, integrating data silos is the first step. Then applying an appropriate machine learning tool will deliver the insights needed to inform tangible changes across their enterprises.

It is critical for CFOs also to be dynamic. I mean that CFOs must appreciate that accurate prediction are always based on the latest data. Analytical systems evolve over time as the data they receive expands. Financial data must be augmented with information from ERP systems, CRM platforms, logistic services, and customer-facing environments.

This is a heady mix of data, giving more depth and improving the accuracy of predictive analytics. And these systems are increasingly moving to real-time services. As a result, CFOs know their businesses must innovate at speed. Active intelligence delivers the information sources to create agile and dynamic companies.

Financial Planning & Accounting has in the past been the only focus for CFOs. Today CFOs have a strategic role to play in forecasting the future performance of their businesses. We now have the tools available that can digest masses of data. The power of today's CFOs is their ability to wield these new tools to shape the sustainable future of their companies.

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