Finance Team’s Superpower: Understanding Performance Better, Faster

How the finance team can build business knowledge, increase the depth of analysis, and deliver insights with speed to drive effective business decisions.
Performance
Finance teams are meant to play a critical role in driving business success. Yet, many of them struggle to gain a deep understanding of business performance and drive early, informed decisions. Limited access to data, time constraints, or overwhelming amounts of information can make it difficult to gain valuable insights.
In this article, we will explore the importance of finance teams having a deeper, faster understanding of performance and ways they can build their business knowledge, increase the depth of their analysis, and bring external perspectives to drive business success.

Building business knowledge

As finance teams strive to make an impact, deep knowledge of the context that the business operates tends to be overlooked. To identify valuable insights, finance teams need to understand the specifics of a company’s present operations and goals, as well as the company’s historical results, challenges, and ventures.
Finance teams can build such knowledge through internal training and active collaboration with non-finance colleagues. Positive interactions with departments such as sales, marketing, or engineering provide a wide perspective of the day-to-day business operations and help foster stronger relationships and better communication with other teams.
Another important way to broaden the knowledge of any business professional is by proactively staying up-to-date with industry news and trends, reading professional newsletters and blogs, attending industry events, and joining professional organizations.

Increasing the depth of analysis

Finance teams that drive success go several miles below surface-level analysis.
Breaking down the drivers of regular KPIs provides clues and indications about the underlying factors that impact performance. For example, analyzing sales data not just through top-line revenue but also through its volume and average price drivers, then analyzing those drivers by product, region, and sales channel can help finance teams identify setbacks, new trends, as well as potential growth opportunities.
Expanding the various metrics and dimensions analyzed also provides a more comprehensive view of performance. Continuing on the previous example, analyzing the average price by sales channel and the evolution of the average discount levels, and the types of sales campaigns run on that given channel.
While most of the routine analyses provide a descriptive view of the business, true insights result from a persistent focus on performance root causes. Unfortunately, the sole use of data is typically limited in that regard. Finance teams who unveil the deep reasons for slow or fast growth tend to be those who collaborate daily with other business teams.
Last, external perspectives must be leveraged to complement internal analyses whenever possible. Competitor analysis helps understand how the business is performing relative to others. Market data can provide insight into the industry’s broader trends and challenges. Customer feedback, both quantitative and qualitative, help finance teams factor in the recent changes in customer needs and preferences, and pinpoint areas for improvement.

Delivering insights with speed

Speed to insights matters: it frees up time for impact and enables early decisions.
Efficient data analysis and delivery of insights give finance teams time for activities such as forecast adjustment, planning with non-finance teams, and identifying business opportunities. Limited resources, runway, or room to win make such activities even more critical in small and medium-sized companies.
Much is said about the importance of data-driven decisions. Much less is said, however, on the advantage of deciding early – and executing at pace – in many markets that move quickly. This can be enabled by comprehensive sets of analyses and insights being shared fast with key decision-makers and contributors across an organization.
Typical areas where speed to insights can be improved in small and medium-sized companies include the automation of data collection and processing and the availability of interactive dashboards. However, fixed analysis routines tend to fail to deliver the depth of analysis (described above) required to unveil actionable performance insights. What makes a difference is the implementation of capabilities and sets of tools flexible enough to meet the analysis challenges of each period of the year, product or service, and business area.

Leveraging the finance team’s superpower

In conclusion, by building business knowledge, increasing the depth of analysis, and delivering insights quickly, finance teams can gain a more comprehensive view of performance, identify trends and opportunities faster, and drive effective decisions earlier.
Business-minded CFOs typically build and invest in their team’s capabilities to understand performance better and faster. This is the finance team’s true superpower.
Picture of René-André

René-André

Founder and CEO at qrunchin

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