SunSystems COO addresses analytics in FEI magazine
Using Analytics to Hit It Out of the Ballpark
By John Corden
No longer just for the Fortune 1000 companies, today's analytics solutions provide access to highly accurate, trustworthy data that helps shape conclusions -making users more agile and better informed about all their market conditions.
When a baseball player gets on a hot streak, he can hit any pitch and he'll rarely strike out. Whether hitting singles, doubles or home runs, a player's productivity is as efficient and reliable as a well-run business. When asked to comment on a hot streak, a player might respond: "I'm just seeing the ball so well, it's like swinging at a basketball."
If you follow the analogy, the same scenario applies to CFOs and financial executives when they deploy effective business analytics software. The only difference: success, when achieved, isn't streaky - it's consistent.
Analytics solutions empower financial executives to "see the ball," or in this case the data, with a scope and detail previously unattainable. It's the business world's equivalent of "swinging at a basketball." With an integrated analytics solution in place, budgeting becomes more accurate and effective, and planning and forecasting is conducted with dramatically less complications. With analytics deployed, you know your business inside-out; you are in complete control, and you can respond to all organizational challenges as they occur.
This is a primary reason why corporations across North America are deploying analytics solutions at a torrid pace. Unquestionably,, the cost-savings and efficiency gains delivered by analytics tools offer a rapid return on investment (ROI); productivity gains make this deployment even more enticing. U.S. analyst firm International Data Corporation (IDC) recently concluded that the average company realizes a massive 431 percent ROI on analytics systems over a five-year period.
What Do Analytics Solutions Do?
While the future is uncertain, business executives are less tentative if they can circumvent uncertainty and quickly adapt to evolving market and customer dynamics. To make this possible, companies must be able to improve their ability to identify, classify and intelligently analyze all available information. To do this, companies need solutions that go beyond conventional query and reporting tools.
Analytics solutions provide corporations with the much-needed ability to leverage their existing IT investments, no matter what they are, in a manner that facilitates greater intelligence. If an effective analytics solution is deployed, the financial team can bridge all known and unknown data gaps between all IT systems - including computing platforms, ERP packages, CRM, HR, financial software and legacy systems.
An analytics solution can also be deployed across global operations. As such, analytics will provide the data mining and reporting capabilities executives need to deliver a comprehensive view of their entire organization, in real-time. Better data accessibility, in easy-to-manipulate and easy-to-understand reports delivers better business intelligence. It provides the "why" behind performance questions and alleviates CFO pain by bringing business inefficiencies to the forefront and enable better decision-making.
- Pharmaceuticals can use analytics to review records of cancer patient treatments in a data warehouse to better understand why some treatments receive negative reactions.
- Oil and gas companies can deploy analytics to maintain control of their discretionary cash flow, efficiently determine and monitor cash operating costs and dry-hole costs.
- Insurance companies can use analytics to better forecast auto collisions by region, allowing costs to customers to better reflect local driving habits.
- Hotels can use analytics to assist with evaluating trends in business ratios, revenues, expenses, occupancies, efficiency ratios, market segments and agents.
Leading Your Team to Victory
The finance and information technology industries are abuzz with terms like corporate performance management (CPM), business intelligence (BI) and analytics. Much of this positioning is causing significant confusion for financial executives - and it doesn't have to. Each of these terms represents a means to an end, and that end culminates in a enterprise-wide analytics capability that empowers the finance team to proactively manage key, but intangible, business indicators.
These include: 1. The impact of the falling U.S. dollar on domestic and international sales; 2. The implications of the expanding euro on European business opportunity; 3. The ramifications of the growing outsourcing markets in India and China.
An analytics solution should deliver the ability for better planning and forecasting for business activity based on any variety of factors.
Analytics at Work
An effective analytics portfolio will address operational reporting, monitoring and notification, business modeling, consolidation, budgeting and forecasting. This allows companies to report on, inquire into, monitor, plan and control their business activities. Designed to support the extended enterprise, analytics solutions enable companies to easily share information with employees, customers and suppliers on a secure basis. They ensure that the right information is delivered to the right people, at the right time and in the right format.
Analytics allow companies to monitor critical business processes and key performance indicators (KPIs), notifying key personnel of critical events and situations. The portfolio helps to analyze successes and failures and to plan for future events.
Analytics offer comprehensive financial inquiry, reporting and analysis capabilities in real time and allow close interaction with other applications.
Analytics allow Web-based delivery of information to customers, suppliers and partners, enabling financial information to be easily embedded within intranets or connected to the extended enterprise.
Analytic applications support a range of performance management functions, including enterprise planning, subsidiary management and consolidation.
While analytics solutions have been available, on a reasonably large scale, for a few years, deployments have been limited to the largest companies in the Fortune 1000, primarily due to cost and product execution complexity. Evidence that the marketplace has matured stems from the availability of new, highly customizable analytics solutions that are easy to use.
Today's solutions crush common myths associated with the software, such as: companies must spend exorbitant amounts of money to deploy this technology, and hire statisticians in lab coats to make it work.
If a company selects the right analytics solution for its business structure and environment, decision-makers will have access to highly accurate, trustworthy data that helps shape conclusions and alerts managers to required actions and proposed outcomes. Companies that implement analytics become more agile and better informed about all their market conditions.
John Corden is Chief Operating Officer, Systems Union Group (sunsystemsamericas.com), developers of SunSystems business and financial management solutions and SunSystems Analytics. He can be reached at .