Recent acquisitions of Hyperion by Oracle and Cognos by IBM denote the convergence of the financial domain towards Business Intelligence. A lot of CFOs and Finance directors are increasingly getting inclined towards Business Intelligence software to ensure that Finance and Accounting can be equipped with robust forecasting models to drive effective business strategies.
Challenges in the Finance domain
The common problems faced by a lot of financial analysts are-
- A collection of data from disperse and diverse sources as stated by financial professionals in a recent survey conducted by Teradata- a data warehousing company.
- Inaccurate and complex forecasting methods
- Unavailability of adequate reporting and effective dashboards
- Inability of device robust risk management, governance and compliance models
Business Intelligence changing the face of Finance
Let us now see how a Business Intelligence software and methods can help the professionals in the domain of Finance to overcome the challenges listed above.
- Business Intelligence tools & software helps in collecting data for diverse business units in the form of monthly data pertaining to profit and loss, pricing, revenue generated etc.
- The BI software then helps in consolidating the data and provides different comparison models to compare the data with the corporate budget thereby, helping in converting whole sets of dispersing data into discrete information which helps in arriving at business strategies.
- BI tools help in predicting the profit & loss for the upcoming months. It also helps in analysing the case requirement for the future with the help of predictive analytics model.
- BI methods help in segregating the financial data into back-end systems like sales reports, customer databases, a list of products etc. Consequently, this information can be utilized effectively for making pricing decisions, product innovation strategies etc. Therefore, now there is no scope of guesswork which was previously employed by companies while arriving at prices for products which often resulted in losses as well.
- Real-time monitoring and instant access can be attained by finance directors to a large data set with the help of business intelligence data systems
- Enhanced collaboration across other departments and the finance team can be established with the help of business intelligence methods
- Business intelligence tools can also help in capturing probable frauds, for instance, it can provide information about the spending pattern, payment pattern etc. of individuals thereby, alerting a company about potential fraudulent customers before they offer to do business on credit etc.
Conclusively, the whole domain of finance can be made more effective and efficient with the help of the BI methods.