As an FP&A professional, your main role is essentially providing decision makers with all of the financial information they need. However, organizations are now accumulating a huge volume of data and there is almost a competition with other departments to get it to them. For executives, this often means the amount they are getting is too overwhelming to really use, and time is wasted spent digging through reports to figure out what is really going on that could be far better spent on solutions.
Ariella Tenuta, Director of FP&A at Dreamworks Animation, argued at the recent FP&A Innovation Summit that FP&A professionals should look to provide insights. She defined this as synthesizing information across the organization to provide actionable recommendations.
To do this effectively, she argued that two things were necessary: streamlined reporting and data visualization.
In order to streamline reporting, the first thing to do is take inventory of all the reports you create in you organization. This means listing every detail of all you reports - who it goes to, frequency, and key metrics it provides - to essentially create a report of reports. This should then be taken to stakeholders, presenting them with a full account of everything they get. This way, they can pick out what they don’t want and get rid of it. You can also see where there’s overlaps and what executives are being presented with twice, and can consolidate what’s left.
Once reports are streamlined, it is important to lay out information out in as visually compelling a way as possible. This requires data visualization, presenting the data in a way that tells a story, filtering out the noise and revealing hidden trends and patterns that can generate valuable business insights. If a dataset has thousands of different points, it is going to be almost impossible to spot any correlation on an excel spreadsheet. Visualization reveals intricate structures in data that cannot be absorbed in any other way, and storytelling with data visualization draws an impactful response from the user and reinforces it with numerical evidence. It means that problems can be spotted faster, and solutions implemented as early as possible. Data visualization also means that you have one central source of truth for information that can be viewed across the entire organization, with all employees able to interrogate and interact with the data.
There are issues with both of these solutions. When culling reports, you’re undoubtedly going to get some pushback from executives and other teams. It is important to communicate that they will actually be getting more and higher quality information, and work with stakeholders to ensure they have what they actually need and use.
Data visualization is also still limited in that it relies on human perception and evaluation to extract insight and knowledge. However, ultimately, you can spend as much time as you want interrogating the data, producing hugely detailed tables filled with every piece of information that a stakeholder could possibly need, but if it’s not communicated in such a way that decision makers can use it for insights, it is basically for nothing.