[IMGCAP(1)]Financial organizations around the globe have made significant investments in technology, data warehouses and enterprise resource planning systems to capture and store data, yet few have developed the talent, tools and processes needed to turn that data into valuable insights. Using business intelligence and analytics (BIA) can help organizations use that data to understand their customers and maintain a competitive advantage while delivering better business outcomes.
When it comes to financial reporting, organizations often spend countless hours crunching massive amounts of data and while working to meet increasingly stringent standards, such as Sarbanes-Oxley and the International Financial Reporting Standards (IFRS), many financial organizations measure themselves on cost management and return on investment. However, the external market focuses on different issues, such as market share and how well the firm is positioned to weather market shifts.
Financial executives who turn to analytical systems that reflect only an internal perspective will fail to monetize and gain these kinds of valuable insights from outside the organization. Savvy organizations should consider adopting a model with integrated analytics that yield actionable business insights.
But in today's environment, simply mastering the mechanics of financial reporting is not enough. While financial reporting may be driven by standards and compliance to regulatory requirements, it is not always informative or helpful in decision-making.
For example, a company that relies on advertising revenue can use BIA for billing and revenue recognition, as well as to allow sales to see who clicked on what ad and when. With that behavioral information, the organization can then optimize ads for specific audiences and times.
To gain a clear understanding of their financial realities, C-level executives need a more structured, predictive program of analytics. Those that do will realize benefits, such as improved compliance, reduced costs and new business opportunities.
How do enterprises begin? To focus on analytics as a process - not an outcome - financial organizations should consider working with a reliable business process outsourcing (BPO) provider to handle data quality and standard reporting "muscle." This enables organizations to focus on higher-level judgments to manage final outputs and responsibilities. As a result, organizations can reduce working capital requirements, the cost of customer acquisition and management, and overall supply chain and procurement costs.
Surveys by industry analysts show that successful BIA initiatives focus on master data maintenance, data quality, and providing a solid foundation for decision making. Outsourcing BIA work to a valued service provider allows the organization to apply the right talent to every task, while ensuring a seamless transfer of skills and knowledge to the internal team. The partner provides ongoing training, addressing soft skills, as well as new analytic frameworks and techniques. By treating data as an asset, organizations can focus less on gaining data and more on the business value outcomes.
And that's not all; by adopting the aforementioned approach, organizations can expect to gain the following benefits:
- Accelerated Growth -- Organizations can make faster, more accurate decisions by establishing a repeatable process (not dependent on the solo practitioner) that leverages data. By shifting the mechanics to a BPO provider, the enterprise now has access to cutting-edge technology, new research findings, and standardized analytic tools and methodologies.
- Mitigated Risk -- Organizations can better manage credit exposure, which creates supply chain flexibility to optimize inventories and reduces losses from diversion, counterfeits, revenue leakage and fraud.
- Lowered Costs -- Organizations can reduce working capital requirements, the cost of customer acquisition and management, and overall supply chain and procurement costs. Additionally, they gain increased visibility into spending related to analytics and reporting.
- Improved Compliance -- By partnering with an outsourcing partner that provides the capabilities to meet the reporting requirements, organizations gain the ability to comply with statutory or tax requirements.Leveraging a BPO partner establishes a clear delineation between rules-based policy and compliance with analytic activities that bring ownership and credibility to financial statements.
To meet the changing demands of business environments, financial organizations must realize that the traditional approach to reporting is not enough to gain visibility. By choosing a trusted partner for analytic services, organizations can harness a reliable and consistent approach for gaining a truer understanding of their business - and translate understanding into actionable business insight.
Paul Allan is the Global BPO Portfolio and Service Line Leader, at HP Enterprise Services