If a picture is worth a thousand words, what is one chart worth?
For some CFOs, as they head into 2018, the answer is potentially millions in revenue, increased influence in the boardroom, and a fast track to the CEO position. Here’s why: Finance teams are being tasked with processing—and making sense of—more and more data. In fact, according to our recent Adaptive Insights CFO Indicator Report, 58% of CFOs expect the amount of data they process to increase by up to 50% over the next five years.
In a recent webinar we presented these three steps to help you understand more clearly what the data is telling you:
Step 1: Open your eyes to insights
While most company leaders would prefer too much data over not enough, trying to make sense of all those numbers in a spreadsheet can be like drinking from a firehose. Endless rows of numbers simply don’t tell a story. And CEOs, board members, department heads, and other C-suite executives don’t always have the financial training or the time to make sense of the numbers.
But by visualizing financial data so viewers can distinguish patterns and focus on what matters, you can quickly and easily present the numbers in a way that tells the story behind them. Instead of hitting your leadership team with endless rows and columns of numbers, you can provide strategic insights so they can make critical decisions.
Step 2: Take off the blinders
Despite the promise of data visualization, few CFOs right now take advantage of its power. According to another CFO Indicator Report, only 16% of respondents say they are currently generating visual reports, compared to a whopping 59% of reports delivered in spreadsheet format. It’s not that they don’t recognize the value in financial dashboards. It’s that spreadsheets aren’t conducive to quickly creating charts and graphs.
If you’re working primarily with spreadsheets, you can easily spend half a day producing a graphic, only to have all your work undone by a last-minute update to the data it’s based on. Even when things go well, you’re likely to spend so much time on producing the graphic that you don’t have enough time to analyze the “why” behind the numbers.
Step 3: Visualizing financial data drives better decision-making
Despite the current lack of visualization in reporting, CFOs recognize the need to improve the way they present their financial data. When asked what FP&A teams could do to be more effective, 31% of CFOs mentioned improving data visualization skills. In another survey, 53% said improving data visualization is an initiative their team would undertake within the next year.
Financial data visualization isn’t just about reports. By using active planning and real-time dashboards, your team can have a dynamic visualization into what is going on in the business at that very moment, helping drive decision-making now instead of at the end of the month. This functionality doesn’t exist for teams that rely on emailing spreadsheets back and forth; you’ll need smart financial software and automated data collection to take advantage of this new kind of financial data visualization. But once you get it in place, you’ll see—in this case, literally—the difference it can make.