Accountants and finance teams have an opportunity to lead their organisations to better business decisions driven by insights from analysis of big data, rather than following a familiar pattern of reporting on past events.
The profession needs to prove its future value by evolving from reporting on previous performance towards forward-looking analytics that help businesses make swift and robust decisions in real time.
A new report from the Association of Chartered Certified Accountants (ACCA), Chartered Accountants Australia and New Zealand (CA ANZ) and NTT DATA reveals that the technological revolution has thrown up an unprecedented chance for finance professionals to champion and lead the use of data analysis, broadening their influence.
However, a survey of 1,150 accountancy professionals showed many were slow to leave behind traditional reporting of results.
The Analytics in Finance and Accountancy report was also based on 30 detailed interviews with finance leaders and data specialists from a range of industries across the globe.
“The research highlights an industry evolving from handling just financial data towards dealing with a diverse array of financial and non-financial information and data,” said Ainslie van Onselen, Chief Executive of Chartered Accountants Australia and New Zealand.
“This is enabling organisations to make data-driven decisions more quickly, driving tangible results.
“One example is the use of different data types and predictive analytic tools by finance teams during the COVID-19 pandemic. This has enabled finance teams to truly partner with the business, providing them with the insights needed to make better faster data informed decisions amidst the uncertainty presented by the global pandemic.”
Author Clive Webb, head of business management, ACCA, wrote: “Our survey shows some reluctance to move from looking backwards to looking ahead. Traditional reports are in the comfort zone for the majority of finance teams. But the most progressive and successful finance teams are those that use data to look ahead to remain relevant in organisations.”
The report added that finance professionals using forward-looking tools are vital to their organisations. These include predictive analytics, which uses existing data to make statistical models of what is predicted to happen in the future, and prescriptive analytics goes a further step by suggesting a course of action from a set of options.
Utilising these two forward-looking disciplines, organisations can predict future performance and be helped with making the best decision available to them.
Helen Brand, chief executive of ACCA, wrote: “Many accountancy and finance professionals are still using rearward-looking analytics: reporting on past performance and telling their stakeholders what has happened. There has never been a greater need to invest in forward-looking analytics.
“Accountancy and finance professionals need to ensure they are developing skills in the appropriate directions, to provide our stakeholders with forward-looking insights.”
ACCA and CA ANZ have both been updating their qualifications to ensure members and future members can develop the right skills needed to understand and apply the insights data can offer.
Chief Financial Officers (CFOs) are increasingly being required to act as enablers of decision making for the whole organisation, based on interpreting the vast amounts of data now available to them.
Analytics can be vital in driving business efficiencies, risk management, planning, budgeting and forecasting.
The report identified five key areas of focus for businesses to create a data-centric culture, including strong governance, improving big data capabilities, making sure an organisation has the right capabilities and opportunities to educate employees about data literacy, showing how insights can help to make strategic decisions and using predictive and prescriptive analytics.
Simon Williams, CEO of NTT DATA UK, said: “Becoming a data-driven organisation is the common goal of businesses around the world. Building the capability to make better use of data, through predictive and prescriptive analytics, lies at the heart of almost every digital transformation project. It’s about making decisions based on data and not conjecture.
“This report demonstrates that it is not sufficient to simply build the tools in order to be data-driven. A business needs to instil the skills, knowledge, and the capability within its people to build a data-centric culture and create trust in its data.
“Accountancy and finance professionals are well placed within modern businesses to be the champions of trust in data. They hold many of the skills required to cover the bridge the gap between data scientists and business leaders, and by supporting them with training and support, businesses will be able to bridge any data skills gap. With the right skills and tools, they have the ability to fuel the success of their businesses and create tangible, long-lasting results.”