The blueprint to AN Analytics Culture for data driven decision

This is the second of four articles describing the Finance journey towards becoming a world class strategic partner. In this article we describe the Roadmap for implementing an analytics culture that enables business leaders to take data driven decisions.

Much has been written about improving Finance business partnering and how Finance should move from the trusted scorekeeper in the back office to a front-line strategic partner.  Finance wants and needs to have a seat-at-the-table for strategic and operational decisions.  To get there requires a disciplined, step by step journey that is benchmarked along the way to assure focus and prove attainment.

Gaining a seat at the table requires delivering insights; that is, to tell the business something that it both does not know and when known could influence or change a decision.  Even more value is provided when foresight is delivered; that is, an often-reliable prediction of the future.  As such, insights influence decisions, and foresight impacts the strategic direction.  The former provides knowledge about the past and the latter a forecast of the future (with all things being equal).

Building an Analytics Culture

Building the culture to advance Finance from average to world class has four key components: (1) Mindset, (2) People, (3) Processes, and (4) Systems.  These components, when aligned, institutionalize the practices about data driven decisions for business optimization.

Creating a “culture” of data driven decisions with analytics requires a Roadmap to advance Finance to the world class strategic business partner.  Depicted in the Figure, illuminates the four components of culture as a tightly integrated and interdependent framework.

Mindset

Mindset regards Finance participation in the decision process. Each Mindset has a corresponding “Persona” and is related to a step on the stairs of Next Generation Finance (discussed in the previous article).  We encapsulate four Mindsets with its Persona in the table below:

In short, the Reporter focus is on “What happened”, the Commentator on “Where it happened”, the Advisor on “Why did it happen” and the Strategist on “What might happen”

People

People is about Finance, as a group, and how each individual views his role in participating in decisions.  To go beyond a Reporter, there needs to be a “sufficient” number of people for analytics and an aligned Mindset to establish a culture of data driven decisions.

Processes

Processes regard the written procedures needed to institutionalize data driven decisions.  Process are in two main groups of Data Governance and Decision Governance.  The former is about assuring data used in decisions is accurate, complete, timely, and accessible.  The latter regards the decision-making process itself to identify the decision-making participants, steps, and authorities.

Systems

Systems is the hub of analytics and regards the technology employed by each Persona in the application of the Mindset, as follows on the table below.

The Roadmap

The coordinated combination of the four components of Mindset, People, Process, and System is crystallized on the figure below.  This is the Roadmap to build an analytics culture for data driven decisions that enables Next Generation Finance to become World Class Strategic Partners.

The X axis is the Mindset to contribute to decisions, and the left Y axis the analytics intelligence for each Mindset/Persona.  Below the Commentator is routine reporting that supports decisions but has no analytics intelligence to influence or impact decisions.  The right Y axis links the System to the Persona.

Analytics starts from the Commentator and becomes more advanced as Finance progresses towards the Advisor and Strategist. The two latter Personas provide insight and foresight to influence and enable business leaders to take better decisions to impact the execution and strategic direction of the company.

With the Persona of a Strategist, analytics intelligence becomes predictive and Finance needs access to advanced analytics tools of Discovery, Visualization & Analytics.  The two Z axis engage the People and Process, noting there needs to be a sufficient number of people and written processes to build, institutionalize, and sustain a data driven decision culture.

If the four components are not aligned it is lowest stage of any of the four component that determine your persona. If you want to impact (Mindset) by providing Foresight (Analytics Intelligence) and you have an advanced analytics skillset (People) combined with strong data governance (Processes), but your analytics toolbox is only Excel (Systems), then your four components are not aligned and the lowest stage of one of the component Systems determine your persona. As such, you are only a Reporter and you need to invest in Systems to advance you persona (and your career) towards becoming a Strategist.

In our next article we will dive deeper into the component ‘Mindset” and its different personas to understand the Next Generation Finance Skillset for each of them on the journey towards a World Class Strategic Partnering.