The IBM Center for Applied Insights surveyed 337 senior finance leaders on their adoption of analytics. It may not be surprising, but the survey found that organizations plan to double adoption of analytics in all areas of finance in the next two years. A report citing the study answers the why: “As one executive admitted, ‘Advanced analytics gives me answers to questions I didn’t even know I had.’”
Interestingly, 28 percent of the survey respondents were categorized as the “most effective” finance leaders. They were more effective than their peers across these ten finance-focused activities:
- Cash forecasting
- Expense management
- Finance process optimization
- Financial planning
- Management reporting
- Mergers and acquisitions
- Profitability and margin analysis
- Revenue forecasting
The same survey found that 9 out of 10 finance organizations have implemented analytics solutions to support their financial processes in the last five years and even more are expecting to implement analytics in the next five years. One of the challenges, though, is that organizations are still primarily using analytics to look backward rather than to predict business outcomes. That ability to look forward is increasingly becoming a competitive differentiator for organizations in nearly all industries.
Even finance organizations that are deep into analytics are still finding new areas to exploit. For example, the survey found that the use of finance process optimization (for cost reduction, accuracy and speed) is expected to grow from 21 percent to 73 percent. Survey respondents expect to apply analytics to the following finance activities:
- Optimizing planning, budgeting, and forecasting processes
- Integrating macro-economic data, industry trends and competitor data
- Revenue forecasting
Now is the time to think about how you are currently using analytics in finance, and where you want to take your team’s use of analytics. The question really isn’t how can you use analytics in finance, but more how can’t you use analytics?
To learn more about what the finance leaders in this survey are doing differently with respect to analytics, download the IBM whitepaper, Finance Analytics: Seven Hows and Millions of Whys.