Every enterprise needs a robust planning process. Corporations in every industry spend vast resources on digital transformation, and financial planning and analysis (FP&A) workflows are a big part of that. These days, data collection is an integral part of every company’s workflow. However, many organizations face challenges when analyzing the data they collect.
Research shows that enterprise data volumes are expected to increase by an annual rate of 42.2% till 2022, to reach 2.02 petabytes. Internally managed data centers, third party data centers, cloud services, edge locations, and remotely managed servers are among the storage solutions enterprises favor for their own repositories – not to mention the hundreds of third-party cloud-based apps logging information on behalf of the company.
Given these different data repositories, organizations must integrate their data effectively to power their FP&A workflows. Here are 4 advantages of seamless data integration.
Accessing Layered Data
Organizations gather data at various levels. From branch to country, and even to regional data, there are many variables to analyze. Organizational needs might require viewing transactions at an account or subaccount level, and these data might be stored in different locations.
Integrating these data on a single FP&A software platform is a no-brainer if organizations wish to gain full transparency into their operations. Some companies prefer to roll data up and run analytics on consolidated views. However, they run the risk of missing out on local variables that might affect the future of the organization.
For instance, a consumer trend that begins in one location might spread to others. Consolidated views will alert companies of this fact much later than a granular view created by cohesive data integration. Companies spend a lot of resources monitoring expenses and forecasting budgets. In such situations, granular data views are necessary to set sensible spending limits.
Monitoring spending variances from projections help organizations plan for the future better. Variances monitored at a high level lack insight, since there’s no telling where anomalies arise. Thus, data integration and consolidation are the keys to ensuring organizational efficiency.
Deciphering Organizational Data
Organizations these days use a wide range of tools to execute their workflows. Salesforce, SAP, QuickBooks, and NetSuite are just some examples. All of these platforms collect data and have analytics packages of their own. In a typical organization, the data collected in these apps are siloed and aren’t visible across all departments.
While internal team FP&A workflows don’t have to be fully transparent, over-restricting financial data doesn’t make sense, since it hampers budgeting and forecasting. Typically, financial teams update a shared spreadsheet to aid monthly processes, but they only create more problems.
For instance, maintaining data integrity is almost impossible, since every department will have its own format and closing times. As a result, everyone updates the shared spreadsheet at different times, in different formats, and the central finance team receives no insight.
A single platform that pulls data from various apps and hosts them on a shared platform democratizes financial data across the organization. Thanks to a fully integrated view, teams can forecast spends that match actuals and minimize variance. They can also spot sources of inefficiency easily.
Democratizing data like this also builds accountability in the organization. Teams are less likely to be profligate if they’re aware of the number of eyes on their data.
Automating Financial Tasks
Organizations rely on automation to complete clerical and repetitive tasks but automating tasks without the right data is a recipe for disaster. Hybrid manual and automated models create more work since humans have to correct and augment automated processes with data that was missed.
By integrating data from all sources, automation can deliver powerful benefits. For instance, a CFO can instantly view the company’s financial statements and bottom line. Thanks to live data feeds, preparing these statements is easy, and organizations always know where they stand throughout a quarter or financial period.
Monthly closes tend to be a problem area for most organizations. Data has to be collected and consolidated from different areas, and by the time they’re manually collected, it’s time to get started on the following month’s reports. As a result, budget forecasts don’t match reality, and finance teams cannot access the insights in their data.
Thanks to integrated data views, automation gains more relevance, since all data is being incorporated into reports. Thus, teams can trust their reports more and use them to send real-time updates. Another side effect of automated reporting on fully integrated data is that teams spend less time verifying data.
Manual and hybrid data consolidation processes require teams to verify the format and audit trails connected to each data variable. However, once data sources are fully integrated by a single platform, audit trails are automatically created by software and data arrives correctly formatted. Thus, there’s more time for value-add work.
Integrated and Efficient
Thanks to data integration, companies can rely on creating better financial models and accurate forecasts. The result is efficient FP&A workflows and financial resilience. Best of all, companies can fully automate data collection and spend more time on analysis that increases their bottom lines.