Finance Analytics

Which business decisions should your FP&A team support?

Demand for analytic-driven decision making across the business has continuously increased.  As more departments build analytic capabilities, finance analytics governance becomes unclear. What role should finance analytics play for the business? How do the best finance teams support analytics?

Download Gartner’s quick guide to help define the scope of finance's analytic support.

Download Finance Analytics Quick Guide

Review the business decisions that should (and shouldn't) be supported by financial planning and analytics.

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    We haven’t yet seen better quality decisions getting made despite investing in data scientists and expensive systems with advanced analytic capabilities.

    CFO, Fortune 500 Company

    Finance analytics: Big investment, very low return

    Finance analytics reporting and support account for almost one-third of finance function spend. But these investments are failing us: Finance data is not suited to modern decision making, and managers lack the knowledge to use it correctly.

    Misuse of finance analytics can cost organizations as much as 1% of revenue per decision, adding up to dramatic business impact over time. 

    Bar graph displaying indexed value of decisions driven by bottom-, average- and top-quality analysis as reportted by senior decision makers. For big strategic decisions, top-quartile analysis can improve decision outcomes by up to 1% of sales.

    Recapture the value of finance analytics

    Enforcing standards through tighter policies and controls will not improve finance analytics usage or usefulness. Instead, as a part of finance transformation efforts, business managers and finance staff should collaboratively define, develop and apply finance analytics. Decision teams with clear data governance roles and responsibilities can brainstorm problem economics, co-create more intuitive reporting formats and push one another’s thinking. 

    Insights you can use

    Leading organizations embrace a business-centric approach to finance analytics. To enable growth, generate finance analytics that significantly improve decision making.

    Create a shared view of business objectives and drivers

    Despite the significant investment in analytics, few finance organizations have attained a high enough level of maturity to implement advanced analytics.

    Business managers and finance staff should co-design finance analytics frameworks for a shared view of performance.

    There is a 50% increase in the share of finance spend on analytics in the past three years
    1 in every 4 decision makers does not use financial analysis as part of the decision-making process.

    Make it easier to act on finance analytics reports

    Shift finance analytics from passive, standardized reporting to more engaging, relevant guidance that encourages dialogue and discussion by:

    • Basing finance analytics on scenario analysis
    • Building more commentary and opinion into finance analytics reports
    • Making finance analytics reports more accessible
    1 in every 4 decision makers does not use financial analysis as part of the decision-making process.

    Use finance analytics to motivate better decision making

    Progressive organizations are reorienting roles for joint finance analytics decision making. To start, focus on business decisions first and finance analytics last. Then improve finance analytics problem-solving processes by anticipating and planning for failure early.

    Only 47% of decision makers say financial analysis adequitely portrays the story of their business area and its performance.

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    Case Study

    How Gartner helps clients with finance analytics

    Listen to the CFO at March of Dimes discuss how Gartner helped with finance analytics, specifically defining metrics and creating value.

    Gartner finance analytics experts

    Gartner’s finance experts include more than 35 associates worldwide. Meet a few of our leaders.

    Jake Dunne
    Director, Advisory

    Clement Christensen
    Director, Advisory

    Richard Ries
    VP, Advisory

    Mark McDonald
    Director Analyst

    Gartner’s finance experts are trusted advisors and an objective resource for more than 1,750 finance organizations

    Gartner for Finance provides insights, advice and tools to help finance leaders make the right decisions to drive business results.