How to stop navigating with the rear-view mirror

Financial planning & analysis transformation: the crucial shift from descriptive to prescriptive

FP&A is great when it comes to setting targets for other teams—think budgets, sales quotas, revenue goals etc. But the very team responsible for measuring performance across the organization often lacks structure when it comes to evaluating their own impact. FP&A teams must move away from low-value number crunching to become high-value strategic partners that drive the business. 
 
The following will help teams understand the right level of analytics you can provide for your organizations, as well as other insights gleaned from our Webinar on "The 4 Questions to Ask for your Finance Team" and "How to Stop Navigating from the Rear-View Mirror."
 
Understanding your analytics maturity

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The Gartner Data Analytics Maturity Model is comprised of four stages which are defined by the simple questions asked in reference to the data:
 
1. Descriptive 2. Diagnostic

What happened?

Why did it happen?
  • Historical-only reports
  • Trend charts
  • Rear-facing metrics
  • Variance reporting
  • Static budget vs. actual
 
3. Predictive 4. Prescriptive
What will happen? How can we make it happen?
  • Rolling forecasting with real-time data
  • Scenario planning
  • Optimizing for actions that result in revenue growth
  • Model/bottom up thinking
  • Scalable business drivers
 
The framework is most effective when its applied to an event that is representative of an entire team effort such as a quarterly board presentation: 
 
  • Was the board satisfied with our explanation of what happened?
  • Do they agree with our reasoning of why it happened? 
  • Do they clearly understand what will happen?
  • Are they convinced we know how to make it happen?

 

Becoming a high-value strategic partner in your business

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blog quote.pngWithout prescriptive analytics you’re navigating with the rear-view mirror—you won’t be able to accurately predict the future or determine how to reach the goals of your business. It’s crucial to reflect on where your organization lies and begin strategizing how to move from low-value number crunching to high-value strategic partners that drive the business.START FREE TRIAL

About Jirav

Jirav delivers smarter financials and faster insights, helping you understand where your business has been and forecast where it’s going. Our all-in-one budgeting, forecasting, reporting, and dashboarding solution offers faster implementation and a more intuitive interface allowing finance leaders to build financial models in hours, not days, and generate financial reports in minutes, not hours.