Laura Timms Product Strategy Manager at MHR Analytics, discusses how to future-proof a business and why it is necessary to evolve from a ‘hindsight mentality’.
An uncertain business climate doesn’t have to mean uncertainty in your business, says data analytics expert, Laura Timms.
Despite complex challenges on the horizon, the wide availability and adaptability of data analytics means managers can take proactive steps to futureproof their organisations.
As Product Strategy Manager at MHR Analytics, the business intelligence and financial performance management provider, Timms sets out five ways companies can harness data analytics to thrive in tough times and plan confidently for 2020 and beyond:
- Reduce unnecessary expenses
A key part of preparing for the future is watching what we spend now.
Deciding where to cut funding can easily be left down to intuition rather than truly understanding key and ‘not so key’ revenue drivers.
In Deloitte’s Analytics Advantage report, revenue generation or cost reduction was reported to be the most valued outcome of using analytics.
How? By aligning budgets and resources, funds can be redeployed to meet critical objectives and lower costs. Taking this approach, we recently helped one of our customers deliver savings which equated to a return on investment of 250%.
Analytics acts as a strategic tool which can be used to give insight into areas such as investment opportunities, financial performance and key financial drivers; to give managers peace of mind that resources are always allocated in the right place, at the right time.
2. From hindsight to foresight – see and respond to changes in real-time
Organisations that are able to respond to changes quickly are better equipped for success.
As Mckinsey laid out in its five trademarks of agile organisations: ‘Technology is seamlessly integrated and core to every aspect of the organisation as a means to unlock value and enable quick reactions to business needs’.
To future-proof a business, it is necessary to evolve from a ‘hindsight mentality’ that tries to accompany change once it’s already happened; to an approach that identifies and responds to changes as they happen in the moment.
This is where analytics comes in. Business intelligence and analytics technology can provide a real-time view of an organisation so that employees can easily adapt systems to changing business strategies and realities.
With analytics, businesses can provide products and services that meet changing customer requirements, match outputs to available resources and ultimately make smarter decisions.
3. Scenario modelling to plan for different possible outcomes
There are two types of organisations: those that are reactive and those that are proactive.
While reactive businesses simply try and diffuse an already burning fire, proactive organisations identify the risk factors involved and question not only what they need to do to prevent the fire, but also whether there are any hidden risks or opportunities accompanying the disaster.
The good news is that even for those that currently fall under the first category, data analytics can easily change this.
Certain analytics technologies provide scenario planning capabilities, which enable managers to model different potential scenarios and outcomes. This can supercharge the effectiveness of decision making, as it provides front-row seats to see how different decisions will impact the organisation – all without having to commit to one particular course of action.
When this scenario modelling is ‘multi-dimensional’, you can see how change in one area of the business will impact on other areas, to ensure the whole business is optimised for success.
Whether it’s a change in legislation, cuts in funding or changes to company structure – managers can plan and prepare in advance and reduce the risk of any nasty surprises.
4. Free up more time to spend on what matters
Chances are, businesses that are not using analytics to carry out their planning are probably relying solely on spreadsheets.
Think of the number of different spreadsheets in your department alone and think of how many hours are spent in a typical week updating these – the answer is probably too many.
While spreadsheets are widely seen as the building blocks of planning, relying on spreadsheets alone is neither a reliable or efficient way of preparing for the future.
Repetitive administration tasks can hold companies back and are not always necessary.
A better approach may be to utilise a ‘planning analytics’ solution to reduce these time-consuming jobs and simplify planning, budgeting and forecasting processes.
This eradicates the need for data input-led roles and allows the costs associated with these positions to be better utilised in higher-value tasks. Not only does this provide financial benefits in terms of ROI, but it also works to the advantage of employees by allowing them to focus on ‘what they’re trained to do’ over routine tasks.
Ultimately, analytics frees up more time to spend on the initiatives that really matter, positioning organisations in the best place to meet objectives.
5. Full organisational view of planning
Without a holistic picture of the organisation, it’s impossible to safeguard it against future changes.
While localised planning limited to individual departments and teams may be convenient, it doesn’t offer the scale of impact needed for success. To truly prepare for the future, the whole organisation has to be on board.
Another downside of relying on spreadsheets alone to plan is that they’re simply not designed to tell the whole story. With different teams using different spreadsheets, input methods and analysis techniques, and little collaboration between this data, the task of collating and making sense of it isn’t an easy one.
On top of this, manually inputting data into Excel documents leaves room for human error, with various studies even suggesting that almost 9 out of 10 spreadsheets contain errors.
Planning analytics software puts all this sporadic data into one centralised place to give a 360-degree view of an organisation.
Through this, you’ll be able to see and understand your business at a granular level so that you can gain early insight into the health of your organisation and plan with confidence.