Finance teams have always been responsible for reporting on the health and performance of their businesses. Historical reporting according to generally accepted accounting principles (GAAP), however, doesn’t always present the clearest picture. Sometimes, other measures provide better trajectory projections or other insights for the management team. One key challenge CFO’s face is the shift from reconciliation to a greater focus on how we get the right analytics and business insights from data.
Innovation in technology has provided finance leaders with more tools to be successful in their roles and aggregate data across the enterprise to help them make informed decisions. As a CFO, I’m constantly evaluating and leveraging technologies to help streamline processes. Technology makes things like reporting much simpler than the way things were done in the past. We now have opportunities to access data in real-time and use that information to inform how we operate as a business.
In my experience, it starts with developing a common language with the management team. The common language focuses on two main things: key performance indicators (KPIs) and critical metrics for evaluating the growth of the business. Some examples of KPI’s include customer lifetime value, customer satisfaction, sales targets, operating margin and revenue per customer. Some examples of critical metrics include sales revenue, net profit margin, gross margin, lead conversion rates, website traffic, retention rate and customer acquisition cost.
Each of those metrics is going to mean more to one department than the other. Operations may be celebrating customer retention numbers while the sales team worries over the gap between their forecasted target and where they ended up. This is true of any team in any company. What’s important is uniting these experiences into the common goal. Once you have these definitions in place, it becomes easier to map out a process for using a technology solution to automate the calculation and reporting into dashboards.
Let’s say I’m able to report on the KPIs of the business at any moment with a technology solution like Domo. This gives our management team a common view of the performance of the business and provides us the ability to react in real-time. What KPI’s are we making? Which ones are we falling short on? With these dashboards, we can easily acknowledge both success and failings, and adjust our plan as necessary. If we’re underachieving in one area of the business, we can pivot our strategy and adjust our expenditures to realign to our plan. Having access to these analytics allows me to feel confident in the decisions I make every day.
The ability to access data across the enterprise also helps CFOs to inform decision-making and further understand the business. The trends revealed from these large data sets give a more accurate picture of what’s happening in the business – areas of improvement and areas of achievement. Technology offers a holistic view of the business and helps simplify the strategic decision-making process for business leaders.
Technology and big data analytics offer CFOs the opportunity to be more effective strategic leaders for the business. This helps finance leaders decide what parts of the business need to adapt, shift or adjust to achieve KPIs.
Consider a few examples to better understand how this thinking might be applied. Take for example Radio-Frequency Identification (RFID) technology. It’s more than just supply chain or inventory management. The chips in RFID devices carry bytes of data that can be aggregated to understand the bigger challenges of the business. For businesses centered around inventory, having the ability to not only know where that inventory is, but also understand the processes around shipment and tracking. This gives them greater insight into their operations. With this information, they can make changes to their strategy to improve processes and management.
Another example of how to leverage data to make better business decisions is the Internet of Things (IoT). The data gathered in IoT devices can also be aggregated to understand broader trends. IoT helps CFOs understand consumer trends and market opportunities. With IoT information is more real-time than it’s ever been before. CFOs can now understand what’s being sold and how it’s being used. These insights inform every part of the business including go-to-market strategy, product development, and user experience.
Data plays a large part in what we do. You could even say it’s the basis of all our solutions. And we understand the importance of accuracy. When you have access to the numbers, the actual data, it doesn’t make sense to guess. That’s the value of the Motus Platform. It gathers millions of data points across the country to ensure employers are reimbursing their employees fairly and accurately.
Another area no company wants to guess at is compliance. Whether its meets labor law or IRS standards, no business wants to be in doubt. Before the level of insight we have today, that assurance was maintained by a knowledge structure. With more automation present in the workplace, more of those knowledge structures have shifted from human experts to coded programs. But within that change, there are disconnects. For example, do you know what makes a mileage log IRS compliant? The difference can mean possible exposure to IRS audit.
Our platform ensures mobile workers submit mileage in IRS-compliant logs. Then it goes a step further, distilling each trip’s information into actionable data. If there are mileage discrepancies, administrators can dig deeper into those trips. Or, if employees haven’t submitted insurance, the platform flags that as an issue.
In the grand scheme of your business, your vehicle program might not seem like a priority. But times have changed. The deeper insight you can now gain into your mobile workforce with the right vendor shows how far we’ve come. The also show impactful those data insights can be, even around something as small as your vehicle program.
If you’re not currently leveraging technology to inform financial decisions, you’re not making the most of the tools at your disposal. Now is the time to start evaluating the options available. You don’t have to commit to drastic changes. You can start small. Find the right vehicle program based on your needs and you’ll be better positioned to lead your business to the next stage of growth. Learn more about which program, or programs, best fit your company.