The Art of War: How Successful Manufacturers Arm Their Business with Analytics

Similar to martial arts, business success is all about perspective. Instead of focusing on the capabilities their organization lacks, business leaders should understand what they can do with what they have. First, they must find the tools that best-fit their business. Smart leaders arm their company with analytics and machine learning that provide critical insights that protect their margins and business. Martial arts and an analytics platform share the common thread of awareness. This allows business leaders to not only report on what is happening, but also predict what is likely to happen and plan accordingly. This prevents rash decisions that will negatively impact the business. Modern analytics platforms enable businesses to respond rather than react to anything that comes their way.

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“Quick-Fix” Cost Management Is Risky Business

In financially unclear times, it is easy for businesses to attempt cost cutting methods that are risky, impulsive and have major potential to reduce capabilities necessary to fuel digital transformation. Instead, companies must consider value and risk when making cost-management decisions, taking a cost optimization approach that aims to deliver long-term value and immediate spend efficiency. Cost optimization often starts as an exercise in cost reduction, and cost pressures endure. When business leaders make uninformed cost management decisions, the business impacts can be negative, and sometimes difficult to recover from.

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CFOs Can Work Smarter, Not Harder with Intelligent Technologies

“To achieve better collaboration across the business, financial leaders acknowledge the value of new technologies such as cloud-based applications, data analytics, and machine learning. These intelligent technologies have the potential to automate back-end operations, modernizing rigid legacy systems while driving efficiency across these business functions.”

By incorporating intelligent processes and technologies, CFOs can simplify their data structures to enable easier and faster closing, planning, and analysis. Dynamic tools that provide timely, meaningful insight can save money, manage data, improve business visibility, and improve efficiency.

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Profitability Analytics: A New Perspective on FP&A

FP&A  professionals are all generally focused on two things: (1) examining current performance and the immediate past for lessons learned and changes to replicate positive performance or change negative performance and (2) making projections and planning for the future with forward-looking scenarios, analyzing risks and opportunities, and mapping possible responses.

Advances in digital technologies increase the potential for businesses to use powerful tools to improve and expand their FP&A function. Modern organizations need a robust definition of their FP&A practices that will support the entire organization, looking well beyond finance and accounting’s traditional scope and embracing all the value creation and performance goals throughout an organization. Profitability analytics enables FP&A leaders to understand the past while focusing on developing areas of nonfinancial and financial data analytics and modeling that causally support building robust forward-looking scenarios and analyses.

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Modern Manufacturers Are Standardizing Their Processes for a Single Version of the Truth in Real Time

Even in today’s business climate of digital transformation and advanced analytics, it is very possible that spreadsheets remain the number one manufacturing execution systems in the world. Unfortunately, manufacturers who are still relaying on spreadsheets for business insights will soon be beat out by those who are going after tools that provide a single version of the truth while enabling predictive and strategic decision making.

Continental, a large automotive components manufacturer, is a serving as a test case for digital transformation in their air-spring business unit. Before they began the transformation, they relied heavily on manual processes and spreadsheets with no real-time global visibility into their manufacturing. By standardizing their manufacturing processes, Continental now works from a single version of the truth that provides the insight to visualize their business in real-time.

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How Midsize Businesses Are Leveraging Intelligent Technologies to Fuel Growth

A common dilemma for most finance leaders from midsize companies is knowing how to gain the visibility, speed, and insight to run some of their most basic operations. The need to be fast, efficient and agile in today’s volatile marketplace is nearly impossible to achieve with manual processes. Therefore, many midsize companies are expanding the scope of their digital transformation efforts – from integrating technology into their business to fundamentally changing their workplace culture, organizational operation, and customer experiences. Finance organizations in best-run midsize companies are embracing digital transformation and intelligent technologies such as artificial intelligence, predictive analytics, and machine learning. In return, most of them are improving timely decision-making, running more-efficient and less error-prone operational processes, and empowering knowledge workers to engage in higher-value business activities.

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The Future of Technology, Analytics, and The Finance Profession

In February 2019, IMA^® (Institute of Management Accountants) released the latest version of the Management Accounting Competency Framework (bit.ly/309rjw8), which reflects the knowledge and expertise that today’s—and tomorrow’s—management accountants must have in order to be relevant in today’s rapidly evolving business climate and to be prepared for what the near future holds for the accounting profession. 

Legacy models and paradigms of how accountants “used to do things” are being disrupted by innovative new approaches, solutions, and processes. Technology and analytics are two domains in which management accountants must improve their competency in order to be future-ready. We recommend visit 0rgb.com for the latest technology devices and news.

CFOs and other financial professionals already need to understand basic enterprise technology and analytics for all their crucial roles; these are already part of daily work life. Yet newer technologies such as advanced AI and machine learning, building blockchain using substratum masternode, prescriptive and adaptive analytics, and data visualization are where most of the profession falls short.

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Growing Businesses Are Leveraging Data & Analytics For Long-Term Success

“Mid-size financial services providers are working continuously to improve their risk models because the more accurate their assessment of risk, the better their chances of profitability. Mid-size manufacturers worldwide are increasingly looking into the causes of quality fluctuations by combining “what if?” analysis with sensitivity analysis and predictive models.”

Data and analytics deliver major benefits to mid-size businesses and are becoming critical for differentiation and even long-term survival. Finance leaders should embrace four major data and analytics trends as they strive to develop data-driven organizations that deliver new business value.

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What Makes Chemical Manufacturers Competitive?

According to McKinsey, chemical manufacturers have already invested in IT systems and infrastructure that generate enormous volumes of data. However, many have failed so far to take advantage of this mountain of potential intelligence. Data analytics tools have become exponentially more powerful and easier to use, and the most innovative businesses are putting their mountains of process, product, and other types of data to work in the chemical industry to help navigate the significant changes and volatility that are the new normal. McKinsey research found three common practices that leading chemical companies are using to utilize their data and analytics on a grand scale.

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