Ventana Research Analyst Perspectives

Finance Analytics Requires Data Quality

Posted by Robert Kugel on Apr 22, 2014 9:48:30 AM

Our research consistently finds that data issues are a root cause of many problems encountered by modern corporations. One of the main causes of bad data is a lack of data stewardship – too often, nobody is responsible for taking care of data. Fixing inaccurate data is tedious, but creating IT environments that build quality into data is far from glamorous, so these sorts of projects are rarely demanded and funded. The magnitude of the problem grows with the company: Big companies have more data and bigger issues with it than midsize ones. But companies of all sizes ignore this at their peril: Data quality, which includes accuracy, timeliness, relevance and consistency, has a profound impact on the quality of work done, especially in analytics where the value of even brilliantly conceived models is degraded when the data that drives that model is inaccurate, inconsistent or not timely. That’s a key finding of our finance analytics benchmark research.

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Topics: Big Data, Planning, Predictive Analytics, forecasting, Governance, Budgeting, close, Finance Analytics, Tax, tax data warehouse, Operational Performance, Analytics, Business Analytics, Business Intelligence, Business Performance, CIO, Financial Performance, Governance, Risk & Compliance (GRC), In-memory, Information Applications, Accounting, CFO, Risk, risk management, CEO, Financial Performance Management, FPM

Finance Departments Still Lag in Using Advanced Analytics

Posted by Robert Kugel on Apr 11, 2014 9:54:34 AM

Business computing has undergone a quiet revolution over the past two decades. As a result of having added, one-by-one, applications that automate all sorts of business processes, organizations now collect data from a wider and deeper array of sources than ever before. Advances in the tools for analyzing and reporting the data from such systems have made it possible to assess financial performance, process quality, operational status, risk and even governance and compliance in every aspect of a business. Against this background, however, our recently released benchmark research finds that finance organizations are slow to make use of the broader range of data and apply advanced analytics to it.

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Topics: Big Data, Planning, Predictive Analytics, forecasting, Governance, Budgeting, close, Finance Analytics, Tax, tax data warehouse, Analytics, Business Analytics, Business Intelligence, Business Performance, CIO, Financial Performance, Governance, Risk & Compliance (GRC), In-memory, Information Management, Accounting, CFO, Risk, risk management, CEO, Financial Performance Management, FPM

Five Priorities for the Office of Finance in 2014

Posted by Robert Kugel on Feb 20, 2014 1:35:32 AM

A core objective of my research practice and agenda is to help the Office of Finance improve its performance by better utilizing information technology. As we kick off 2014, I see five initiatives that CFOs and controllers should adopt to improve their execution of core finance functions and free up time to concentrate on increasing their department’s strategic value. Finance organizations – especially those that need to improve performance – usually find it difficult to find the resources to invest in increasing their strategic value. However, any of the first three initiatives mentioned below will enable them to operate more efficiently as well as improve performance. These initiatives have been central to my focus for the past decade. The final two are relatively new and reflect the evolution of technology to enable finance departments to deliver better results. Every finance organization should adopt at least one of these five as a priority this year.

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Topics: Big Data, Performance Management, Planning, Predictive Analytics, Sales Performance, Supply Chain Performance, forecasting, Budgeting, close, dashboard, PRO, Tax, tax data warehouse, Analytics, Business Analytics, Business Collaboration, Business Performance, CIO, Customer & Contact Center, Financial Performance, In-memory, Accounting, CFO, pricing, Supply Chain, CEO, demand management, Financial Performance Management, FPM, price and profitability optimization, scorecard, S&OP

Opportunity for the Office of Finance in 2014

Posted by Robert Kugel on Jan 13, 2014 8:23:51 AM

Senior finance executives and finance organizations that want to improve their performance must recognize that technology is a key tool for doing high-quality work. To test this premise, imagine how smoothly your company would operate if all of its finance and administrative software and hardware were 25 years old. In almost all cases the company wouldn’t be able to compete at all or would be at a substantial disadvantage. Having the latest technology isn’t always necessary, but even though software doesn’t wear out in a physical sense, it has a useful life span, at the end of which it needs replacement. As an example, late in 2013 a major U.K. bank experienced two system-wide failures in rapid succession caused by its decades-old mainframe systems; these breakdowns followed a similarly costly failure in 2012. For years the cost and risk of replacing these legacy systems kept management from taking the plunge. What they didn’t consider were the cost and risk associated with keeping the existing systems going. Our new research agenda for the Office of Finance attempts to find a balance between the leading edge and the mainstream that will help businesses find practical solutions.

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Topics: Big Data, Planning, Predictive Analytics, forecasting, Governance, GRC, Budgeting, close, Tax, tax data warehouse, Analytics, Business Analytics, Business Collaboration, Business Performance, CIO, Cloud Computing, Financial Performance, Governance, Risk & Compliance (GRC), In-memory, Accounting, CFO, Risk, risk management, CEO, Financial Performance Management, FPM

Software to Fend Off Earnings Restatements

Posted by Robert Kugel on Mar 15, 2013 9:50:43 AM

I’m wondering whether the rapid rise in earnings restatements by “accelerated filers” (companies that file their financial statements with the U.S. Securities and Exchange Commission that have a public float greater than $75 million) over the past three years is a significant trend or an interesting blip. According to a research firm, Audit Analytics, that number has grown from 153 restatements in 2009 to 245 in 2012, a 60 percent increase. What makes it a blip is that the total is still less than half the number that occurred in 2006 as the Sarbanes-Oxley Act began to take effect. As well, the number of companies restating is still less than one percent of the total. Yet it’s a blip worth paying attention to, since the consequences of a restatement pose a serious professional challenge to finance executives. The right software can help address some of the underlying causes that lead to the need to restate earnings.

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Topics: Governance, GRC, Reporting, audit, close, Consolidation, Controller, process, process management, report, Tax, tax data warehouse, tax provision, XBRL, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), Accounting, CFO, compliance, FPM, SEC