Six ways to improve your business decision-making
“A good decision is based on knowledge and not on numbers” – Plato
According to recent Gartner research, finance departments are one of the biggest contributors to the misuse of financial information for decision-making.
Gartner’s research found that both the quality of the data analysis and access to the raw data itself undermines the effectiveness of planning and analysis.
Ask yourself: does the data your finance team provides help or hinder business decision-making?
In this blog, we’ll examine how your finance department can make the most of its reporting to avoid data downfalls and improve decision-making.
Six steps to successful reporting
Ultimately, your data should be accurate, but it doesn’t need to be perfect; it must be pertinent, timely and good enough to inform decision-making.
One way your finance department can make better use of data, resulting in more effective planning and analysis, is by optimising your reporting.
To ensure you’re getting the most out of your reporting, consider the following six steps:
- Choose your Key Performance Indicators (KPIs) wisely and monitor them continuously
- Centralise your data so it’s easily accessible and readily available
- Automate inputs where possible to accelerate data processing and reduce manual error
- Provide visuals and narrative to reinforce understanding and provide context
- Involve end-users in the report design process to maximise value and encourage buy-in
- Monitor report usage and retire redundant reports
Three questions to keep asking yourself
The importance of step 6 shouldn’t be overlooked – you can help keep your reporting optimal and effective by continuously asking yourself:
Q: Are your reports still relevant?
Q: Do your stakeholders understand and use the information they contain?
Q: Would they tell you if they didn’t?
The disuse of financial information: based on a true story
During my time in the finance and software industries, I’ve come across several examples of inefficient or ineffective reporting.
One such case was Simon.
Simon always diligently prepares his monthly analysis pack, but his IT migrated the finance system to a new server while he was on leave and didn’t update his laptop.
Unbeknown to him, Simon still takes his data from the old server, and as a result, his numbers haven’t changed in three months; what’s worse is that no one in the business seems to have noticed.
Not only have any decisions been based on obsolete data, but it would appear they haven’t been based on Simon’s data at all.
Don’t be like Simon!