Newsflash: The Big Data revolution has already happened. Your CFO is done relying on gut feelings or antiquated Excel spreadsheets for planning and budgeting. Bring these to his or her office, and you’ll be dismissed as a data dinosaur.
Sometimes the leaders who’ve earned their post are the last and least likely to want to adopt new ways of thinking or, by extension, new technology. During a recent SAP Game-Changers radiocast, panelists Steve Player, program director of the North American region of Beyond Budgeting; Paul Davis, service line director for enterprise performance management (EPM) solutions at NTT Data America; and Pras Chatterjee, an SAP director of product marketing EPM, liken the finance operation to a ship navigating the high seas. The captain wants to forge ahead, but many of the deckhands are staring off the back of the ship instead of helping chart the course forward.
Don’t miss the boat on budgeting
According to Player, “We are spending most of our time looking at the past reporting, or we are yelling over our shoulder. It does not matter how much technology you have. If you are looking backward, you just cannot add a lot of value to the business.”
Davis offers up a possible reason for such resistance. “From a business analyst or a financial analyst perspective, they’re terrified that it means more work for them.”
He continues that Player is diligently working to evangelize the pioneering mindset, touting new planning and budgeting technology as more of an opportunity to shine than a risk fraught with peril. Player is confident that significant gains exist to be won – hidden value, new customers, and more profitable customers. Some (if not many) of the current C-level execs have grown up with the old Excel sheet system, and they need to clearly understand that there is a more proactive way to use innovative tools and technology for planning and budgeting.
Find the people and tools that can make an impact
The newest predictive forecasting tools can help you scientifically identify correlations and trends to define key business drivers. In a sea of data, you need to understand your customers and their behaviors through concrete evidence that correlates to sales. Big Data experiments are becoming less expensive, but they still take active, focused effort.
Chatterjee believes that adoption and acceptance of new technology really comes down to a savvy CFO. “The CFO is one that has to be the leader in the organization and really provide the tools and ammunition to all his subordinates. In order to develop this team, there is a lot of collaboration that needs to happen. We need to start looking at people who have a much rounder skillset – people that understand the accounting but also general business concepts.”
Davis, however, has a different take. He thinks that folks we have now just need to be unshackled from what he calls “dumb stuff,” such as data gathering, mining, and cleaning. Instead, we need to sell them on an entire vision for the future that empowers and excites them.
He envisions three main ways that organizations will employ predictive analytics:
- Move into niche markets and focus on their best products and most profitable customers.
- Rely on predictive analytics to improve operational metrics – maximizing spend and boosting the bottom line.
- Integrate top- and bottom-line processes, where procurement and contract organization meet, for optimum efficiency and win-win scenarios for both customers and sellers.
To explore even more ways that predictive analytics can impact your planning and budgeting processes, listen to the full radiocast.