As finance professionals adjust into more strategic business leadership roles, the importance of capturing objective data to analyze is increasingly important. Big data has delivered big promises, but one of the most significant challenges for big data has been managing the volume and speed. Without the tools such as cloud-based business financial planning software to better leverage their data, its users have remained relatively niche. But with more intelligent and powerful cloud computing, big data is finally moving into new areas, helping finance leaders close books faster, deliver more accurate reporting, and build more intelligent business strategies.

Big data becomes accessible

The merging of big data with new technology such as budget reporting software has made processing large data sets easier than ever. From mining big data to predictive analytics, finance leaders have tools like cloud-based financial planning software available to them that did not exist previously. These professionals have been asked to apply their systemic approach for numbers to data that reaches beyond financial data. This often includes assessing consumer data to forecast purchase trends, economic indicators to predict market trends, and operations metrics to help streamline processes and cut costs. Beyond dollars and cents, CFOs possess the financial software and technology to extract knowledge from numbers and apply that knowledge to make strategic decisions about the business. Beyond data analysis, CFOs face another new, modern day data challenge. As they’ve taken on larger roles within IT and analytics, CFOs are forced to tackle the growing issue of data management.

This includes both data storage, as well as monitoring and managing data quality. These important tasks not only enable CFOs to do their job, but they allow other functions to operate more efficiently. Without data quality control, CFOs and other business leaders risk making decisions based on flawed insights.

While faster, more reliable data is a stride in the right direction for big data, it also creates new challenges.

Insights into operations

New technology, from smaller sensors to more ubiquitous Internet access, now provides finance professionals access to faster, more reliable data. Remote data sensors are becoming increasingly common, and they’re just getting started.

This trend is fueled by four factors:

  1. the ability to produce smaller microchips,
  2. the development of low-power sensing technologies,
  3. the ubiquity of Internet connectivity, and
  4. improved computer processors that are able to manage a growing number of concurrent data streams.

Perhaps the fifth variable would be the increasing comfort level consumers have with data collection. These advancements allow finance organizations to collect data from a much wider range of sources than was previously possible, including data from retail accounts, online transactions, manufacturing operations, customer profiles, economic data, and other KPIs. With more accurate, comprehensive, and real-time data and financial reporting, finance professionals can gain a greater understanding of who their customers are, how their business is running, and how different growth strategies may affect their bottom line.

Tools to help anticipate business needs

Finance professionals are now relying on a new breed of analytics tools such as Microsoft financial management software that make big data more easily accessible, including machine learning, predictive analytics, and automation tools. Big data, in and of itself, is not useful; it becomes useful when it can provide knowledge, make processes more efficient, and allow finance professionals to deliver better experiences. These tools help finance professionals with detection, classification, probability, and optimization.

Detection involves identifying patterns (trends), targets, and outliers. Data visualization tools that convert large sets of numbers into charts and graphics makes trends much easier to identify, and allow for simple, visual comparisons that can make outliers jump out. The addition of real-time data adds speed to the simplicity that data visualization provides. Finance professionals may use these tools to track competitive changes, news, campaigns, or promotions; detect emerging market trends; or to identify potential supply chain issues before they materialize.

Classification is used quite often in business, although we may not consciously define it as such. Classification allows us to isolate, sort, filter, sequence, and compare data. Classification helps finance professionals become more agile by enabling them to isolate and/or rank audience segments, campaigns, or products. Tools that provide the ability to automate these processes can streamline personalization and allow finance professionals to be more targeted with their outreach. This also empowers finance professionals to create personalized experiences and conduct more intelligent cross-selling.

Understanding the probability of future events through financial forecasting is critical to making strategic decisions. Probabilities can be used to demonstrate the likelihood of an occurrence, to compare multiple events, or to show distributions of potential outcomes. Predictive analytics tools help finance professionals master inventory management, determine optimal pricing for new products, offer more targeted product recommendations, predict sales and support needs, and better manage cash flow.

As agility is becoming increasingly important for finance professionals, optimization is an important use of analytics that helps finance professionals become more nimble. As more real data becomes available, new machine learning tools help finance professionals improve performance by comparing the expected results against their actual results and optimizing their algorithms accordingly.

While many of these methods are not new, new tools, like more powerful processors paired with cloud computing, are now enabling finance professionals to take full advantage of their data.

To learn more about how technology can enable your finance operations, watch our on-demand webinar How to Improve Your Budgeting and Reporting in 2019.