The higher the level of analytical sophistication in an organisation, the more the organisation is able to reap strong business benefits from their data, according to a survey by Deloitte Singapore and Association of Chartered Certified Accountants (ACCA) that assesses the state of analytics readiness at leading corporations in Singapore today.
Finance was identified as the function most driven by business analytics and the top three uses of analytics in the finance department are in the areas of financial planning and analysis (92%), financial control (51%) and statutory reporting (47%).
The survey shows that organisations that are more analytically inclined and have business analytics embedded in the organisation roadmap have better competitive advantage compared to those who have just started on their analytics journey. For these organisations, analytics is now ‘a must have’ and is no longer ‘a good to have’.
However, the majority of corporations in Singapore have not reached this level of maturity. Only 14% are at the level of Analytics Innovators, with well defined analytics capabilities and show continuous improvement in methodologies to adapt to future change.
A majority (79%) of the respondents are Analytics Practitioners, which means that their organisations have applied analytics to their business processes, but mostly to address issues at tactical and operational levels, therefore not harnessing the full potential of analytics to reap greater benefits.
For organisations who are Analytics Innovators, they reap the benefits because all their business decisions are powered by business analytics which is used across all functions/departments and core processes. These companies have the expertise to make sense of data, and the ability to collect it, relate its meaning and study trends from it. This helps to transform data into a fact-based, business intelligence tool for analysing past events and predicting the future.
“There are varied ways in which analytics is structured and managed within organisations," comments Wilds Ross, Lead Partner Southeast Asia, Deloitte Analytics. "It is clear that many organisations are beginning to embrace analytics as a key to organisation growth. In order to gain the competitive advantage, organisations should consider the use of analytics to drive strategy by connecting analytical plans with strategy development processes."
Ross notes that by identifying not only today’s projects, but also those that will follow them over the next few years, companies can gain a multi-year perspective necessary for planning the growth of analytical capabilities, and in turn, the business, over time.
“As businesses are transformed by the impact of business analytics; so will the roles of finance professionals," adds Leong Soo Yee, head of ACCA Singapore.
The survey identified two types of key talents required to capture value from data – those capable of analysing large volumes of data to derive business insights and those with business and finance background.
The survey notes that accountants and finance professionals, who are well-versed in these skills, provide a key resource to drive organisations to a higher level of analytical sophistication.
Most of the organisations surveyed are applying analytics to one or more business processes. However, many areas within these businesses remain untouched. A great deal of data is still not used for decision-making; and many organisations have only rudimentary analytical technology.
Results show that analytics efforts, resources and applications tend to be scattered across the organisation and only 17% of those surveyed have some form of central business and analytics centre or Analytics Centre of Excellence (ACE) that is responsible for and support business analytics throughout the organisation.
The survey has also showed that while data reconciliation allows companies to ensure the consistency and efficient use of data, many analytics initiatives within the organisation work in silos.
For organisations which have two or more different end-user IT systems, only 11% are synchronising and reconciling their systems across the organisation.
According to the survey, Finance has been identified as the function most driven by business analytics (77%). CFOs can play an important role in enhancing structural integration. There is an increasing demand for CFOs to take the lead and solidify partnerships between finance and business teams.
While individual functions/departments tend to work in silos and are usually reluctant to share information across functions, it is the finance department that is uniquely positioned to have full access and visibility over the organisation’s data.
Organisations will be slow to fully capitalise on the potential of analytics unless they are able to overcome several key barriers of which data management and quality, access to talent and IT infrastructure are the most problematic.
About a third of the organisations surveyed do not have controls in place to ensure data integrity. Many continue to struggle with the amount of data at their disposal, and how best to categorise, synthesise, access and analyse it – and then to implement decisions that stem from those findings.
More than half of respondents lack the number of individuals or the skill levels required for business analytics within the organisation, reflected in the fact that these organisations invest less than 1% of their annual revenue in business analytics training to build expertise.
Another key impediment lies in IT. More than half (57%) of respondents indicated that technology infrastructure within their
organisation supporting analytics is either “rudimentary” or “basic” with limited or no predictive tools.