It goes without saying that every successful business needs to be in full control of their finances - both income and expenses. To thrive in the current economic climate, businesses must make effective use of all the data their business produces.
Growth is the key focus and while costs should not be a businesses No. 1 priority, it is paramount that business owners grasp the positive financial impact analytics of their cost and operational performance data can have in both the short and long term.
In a recent survey conducted by BARC, data analysis has been shown to increase revenues up to 8% and reduce costs of business by 10%, arguing that data analysis is the key to deriving meaningful insights in financial data by identifying patterns, opportunities for growth and cost-saving and measuring the value of your business.
Although simple in theory, it is harder to put into practice.
Huge amounts of unrefined financial data filters into your business every day, whether it be from financial systems, through emails, invoices, or via the spreadsheets everyone uses independently. Keeping track of all these numbers is a mammoth task for your financial team and near impossible to interpret.
According to a recent study by Forrester Research, most companies only ever analyse 12% of the data they collect – therefore making decisions with just a fraction of the insight they have available.
Without a process and platform for collecting, managing and interpreting all this data, businesses cannot take advantage of the insights on offer.
However, you don’t need wildly expensive ERP systems and armies of internal data analysts to obtain this value - in fact this can become detrimental, as support to find answers to your current critical problems get embroiled in other departments work-stacks, priorities and politics. Instead, technology and services businesses can do the work for you, providing the means to gather all financial information from disparate sources, then analyse the data and present it back in simple visual formats which are easy to interpret and understand.
In giving budget holders complete but simple visibility of the data, trends, insights and what-if scenarios, it becomes straightforward to answer questions and identify opportunities to deliver growth, savings, efficiencies and improve overall performance.
While identifying growth opportunities needs to be looked at in the context of your individual business, One of the main benefits of analysing spend and consumption data is there are common practices you can take action to identify and drive opportunities for efficiency. Processes can be simplified, human error reduced, productivity increased and usage optimised. You will save money and time, whilst simultaneously increasing profits.
- Analysis and visualisation of payment terms, actual payment times and the commercial value of optimising payment terms allows the finance and procurement teams to collaborate to improve efficiency, reduce cost and increase working capital
- Visibility of invoice volumes, formats, approval timings and whether POs are used/matched visualises the P2P bottlenecks allowing simplification and efficiency decisions
- Spend analytics helps procurement negotiate better, but also identifies best practices and changes consumption behaviour of users
- Analysing usage of components or energy in a manufacturing process, coupled with alerts for spikes and troughs can pre-empt equipment breakdown or identify leaks far sooner than waiting for your next invoice.
In short, with the right insight at the right time, you will be able to make the important operational and strategic decisions based on real-time factual data. Complete visibility of your business consumption and costs is essential to ensuring that your business is running smoothly and efficiently. It gives businesses the competitive edge they need in order to thrive and expand in the current economic climate.
At Barcanet, we chose Microsoft PowerBI as our preferred analytics and visualisation platform. This contains over £22bn of customers data, being analysed to identify growth, savings and efficiencies. We build detailed financial reports and visualisations in a matter of hours - saving our customers time, money and delivering the ability to make quick, simple decisions. Our service does not require costly and lengthy software installations, we simply help you gain insights from your existing data.
Author: Ian Yates, Founder of Barcanet - Ian has over 25 years experience of helping businesses reduce their costs, automate processes and create efficiencies. Barcanet analyses over £22bn customer data. To book a call with Ian e-mail him on info@Barcanet.com