Finance and accounting executives are slow to leave behind traditional reporting of results, said ACCA recently.
According to a survey of 1,150 accountancy professionals by the ACCA, Chartered Accountants Australia and New Zealand, and NTT DATA, less than half of the respondents use forward-looking insights.
“Our survey shows some reluctance to move from looking backwards to looking ahead. Traditional reports are in the comfort zone for most finance teams,” said Author Clive Webb, head of business management, ACCA. “But the most progressive and successful finance teams are those that use data to look ahead to remain relevant in organisations.”
Predictive analytics and prescriptive analytics
Forward-looking tools include predictive analytics, which uses existing data to make statistical models of what is predicted to happen in the future, and prescriptive analytics goes a further step by suggesting a course of action from a set of options, ACCA noted.
Utilising these two forward-looking disciplines, organisations can predict future performance and be helped with making the best decision available to them, the accountancy body added.
ACCA and CA ANZ said they have both updated their qualifications to ensure members and future members can develop the right skills needed to understand and apply the insights data can offer.
According to ACCA, it has just launched a cost-effective online course, the Certificate in Data Analytics (CertDA) to provide learners with an understanding of data analytics and how it can unlock new opportunities.
“CFOs are increasingly being required to act as enablers of decision making for the whole organisation, based on interpreting the vast amounts of data now available to them,” Webb said. “Analytics can be vital in driving business efficiencies, risk management, planning, budgeting and forecasting.”
Based on the survey results, the organisations have identified five key areas of focus for businesses to create a data-centric culture: strong governance, improving big data capabilities, making sure an organisation has the right capabilities and opportunities to educate employees about data literacy, showing how insights can help to make strategic decisions, as well as using predictive and prescriptive analytics.