What Ventana says about the future of finance and analytics
Ventana Research is a leading benchmark research and advisory services organization, providing some of the most comprehensive analyst and research coverage for business.
Gaining the most benefit from a finance system requires an assessment of an organization’s unique needs to identify challenges and areas of improvement. The Ventana Research report Change in the Office of Finance: Evaluating Barriers to Digital Transformation investigates finance systems, practices, needs and potential benefits.
Importance of Finance IT and tangible results
In the fifteen years Ventana Research has delivered research and analysis for the finance industry, their reports found a significant shortening of the monthly and quarterly financial close process. They also note forward momentum in automation and communication across teams via new technology and finance tools. Within organizations, leadership teams have noticed that such improvements signify that the bar is now higher, and that what was once considered average performance for both monthly closing and business performance is now subpar.
With more sophisticated and affordable technology available, organizations recognize
d the need for analytics capabilities. Ventana Research concluded that 76 percent of participants understand that analytics are critical for improving their finance teams’ overall performance. Add to that the discovery that roughly 40 percent of participants’ financial departments were poorly prepared to positively transform their performance.
Ventana Research confirms widespread overreliance on using spreadsheets exclusively and a hesitation to embrace new technology. Despite advances in technology, Ventana Research consistently sees evidence that finance departments are slow or reluctant to change. Even with a growing array of solutions widely available to enhance the effectiveness of analytics by integrating with spreadsheets, and spreadsheets from disparate sources in order to create a bigger, more complete picture, organizations are slow to embrace them.
In a typical organization, the finance department contains five divisions: Accounting, Financial Planning and Analysis (FP&A), Corporate Finance, and Tax. Ventana Research concludes there must be a sixth group: Finance IT, a division responsible for seeking, researching, evaluating and implementing analytics solutions critical to improving the business.
When it comes to Finance IT and creating finance analytics, 22 percent of respondents said their process works very well, an increase from only 3 percent four years ago. As a result of advances in analytics software and easier access due to broader availability, organizations now appear more inclined to use analytics to improve their performance. Ventana Research shows 32 percent of participants use analytics significantly compared to 14 percent four years ago. This increase may also be due to greater availability: in 2014, 26 percent of senior executives reported full availability of finance analytics; today that number has nearly doubled to 46 percent. Businesses recognize that to be successful in today’s market, financial analytics has gone from a “nice to have” to a necessity.
The quality of financial planning and analytics is improving
Ventana Research finds a correlation between the type of software a company uses for budgeting and financial planning and how well their organization functions. Of companies that use a dedicated third-party solution, 66 percent said they have a budgeting and planning process that works very well, compared to 36 percent of those reliant exclusively on spreadsheets. Clearly having an analytics solution makes a world of difference in efficiency and accuracy.
Of participants surveyed, 76 percent cite analytics as critical for improving their performance. Significantly, 34 percent rate the skills of the people creating finance analytics in their company as excellent compared to only 14 percent in 2014. As both the analytics solutions and the skills of those who manage them become more advanced, they provide more value to their organizations.
New technology for an evolving department
In recent years the capabilities of analytics solutions have been enhanced by the integration of artificial intelligence (AI). Ventana Research notes that AI is a “technology that’s already available and has the potential to have a greater impact on how the finance department operates over the next 10 years than it has over the past 50.” AI currently automates an increasing volume of repetitive work, enabling a new generation of finance and accounting executives to provide their workforce with more efficient tools. Robots aren’t about to take over finance and accounting, but automation with AI will transform jobs, shifting time and attention away from repetitive tasks to work that requires insight, judgment and experience.
How IBM helps
Using the power of AI, IBM has developed its own analytics suite of software: IBM Planning Analytics with Watson and IBM Cognos Analytics. Available on cloud, on-premises, and on IBM Cloud Pak® for Data, each offers scalability, ease of use, and economy. Whether an organization employs ten or 10,000, IBM Planning Analytics with Watson and IBM Cognos Analytics have the means to scale easily.
IBM Planning Analytics with Watson helps organizations plan more efficiently, allowing users to test what-if scenarios to provide a full view of possibilities. And it integrates directly with Microsoft Excel, allowing users to work with a familiar interface, enjoying the benefits of an enterprise planning solutions while eliminating the inherent risks of spreadsheet planning.
IBM Planning Analytics with Watson and IBM Cognos Analytics align with Ventana Research findings, with both at the forefront of the finance department need to help users track trends, monitor and manage performance, quickly acquire insights, and uncover root causes to make better business decisions. By taking this customer-first approach, IBM tools help solve the problems many businesses address on a daily basis.
Learn more about the Ventana Research Benchmark Report