The business financial environment has evolved significantly in the current digital age, presenting companies with a series of unique challenges. The increasing complexity of financial transactions, the acceleration of global markets and increased competition have made it critical for companies to understand and adapt to the changes underway. Moreover, the huge amount of data generated daily is both an opportunity and a challenge for any business. Knowing how to manage, analyze and strategically leverage Big Data has become crucial to making informed strategic data-driven decisions and staying competitive in the market.
Corporate financial management and top management
The need to integrate Business Intelligence and Advanced Analytics solutions is therefore evident in order to draw value from data in an agile, timely manner and to take full advantage of the opportunities offered by the current digital environment.
The finance department of a company deals with the management and control of financial resources, a crucial function to ensure the financial health and sustainability of the company in the long term. The CFO (Chief Financial Officer) is responsible for the entire financial area of the company. It oversees overall financial activities, including financial planning, cash flow management, financial analysis, accounting and financial control. Its role is fundamental in defining the company’s financial strategy and in communicating with investors and stakeholders.
The strategic data for the Corporate Finance area
Strategic data is a type of data that provides critical and relevant information for the formulation and implementation of business strategies. Unlike traditional data, which can be more operational or transactional in nature, strategic data is focused on the long-term direction of the company and the strategic decisions that will influence its success.
Strategic data helps to read company performance in three different directions: past, present and future, predicting the impact that each activity will have on other business units and the company’s financial statements.
Strategic data may cover:
- The target market: information on the context in which the company operates, including market trends, customer behaviour, competition and growth opportunities;
- Sales data: to understand the sales dynamics of the company, identify key customers and evaluate the success of sales and marketing strategies, the profitability of different products to guide the allocation of financial resources;
- Supply chain data: covers production, logistics, inventory management and supplier management. They may include metrics such as production costs, operational efficiency, delivery times and product quality;
- Financial performance data: this data allows the CFO to monitor and evaluate the financial performance of the company in relation to strategic objectives. They may include metrics such as profit margin, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), ROI (Return on Investment), and ROE (Return on Equity).
- Internal financial data: these include key financial data such as the company’s balance sheet, balance sheet, income statement and cash flow. This data provides a detailed view of the company’s financial performance and is critical for financial analysis and planning.
- Risk and risk management data: these data concern the identification, assessment and management of the financial risks of the company. They may include data on credit risk, market risk, operational risk and liquidity risk.
BI and Advance Analytics for CFOs and Finance
Artificial intelligence (AI), Machine Learning and data analytics have revolutionized the way companies leverage the strategic data available to CFO and top management. In reality, these technologies offer new opportunities to extract meaningful information from data, generate deeper insights and make informed decisions at any business level, allowing companies to become truly data-driven companies.
Having access to strategic data affects financial decisions at all business levels, providing crucial information for:
- strategic planning (analysis of market data, sectoral trends to identify growth opportunities, assess risks and define financial objectives);
- the allocation of resources (timely budgeting & planning, based on sales targets, profit margins and cash flows);
- investment decisions (assessing the acquisition of new assets, the development of new products or expansion into new markets);
- working capital management (stock optimisation, credit management and supplier debt management);
- the monitoring of financial performance (based on internal financial data, such as income statement, balance sheet and cash flow, it is possible to assess the performance of the company against financial objectives, identify any deviations and take corrective action to improve business efficiency and profitability);
- evaluation of pricing and product strategies (based on market data, production costs, customer preferences and purchasing behaviour, to determine the optimal price of products or services and to assess the effectiveness of pricing strategies against competition. Data essential to guide decisions on market positioning and profitability of products or services offered).
Business Intelligence and Advanced Analytics solutions enable CFOs to analyze financial and business data in depth, integrated, and real-time.
With these solutions, you can identify trends, identify opportunities and access valuable insights to support financial decisions. BI, Advance Analytics, and Data Visualization tools provide interactive reports, intuitive dashboards, and custom data visualization tools to help you interpret results and discover new perspectives.