Imagine yourself as a would-be Indiana Jones or Lara Croft.
Daring archaeologists who venture into the unknown in search of priceless treasures, embarking on a quest to unearth hidden gems of financial data.
Braving the challenges of a rapidly evolving business landscape, you must navigate a treacherous terrain of data silos, regulatory compliance, and shifting market demands.
The ultimate prize?
The Holy Grail of financial management—a single source of truth for accurate reporting and budget planning.
This priceless reward promises to bring order and clarity to the otherwise chaotic realm of financial decision-making, driving growth by providing a comprehensive and consistent view of your financial data.
How can you overcome the numerous challenges you might face in achieving a single source of truth for financial management?
This article will explore the consequences of data silos and the lack of data integration in financial management.
We’ll then discuss how adopting a modern cloud solutions can help you break down these barriers, with a single source of truth as your ultimate prize.
Here’s what we cover:
- The problem with data silos
- The importance of a holistic approach to data management
- The benefits of an integrated cloud financial solution
- Make use of advanced analytics and AI
- Final thoughts
The problem with data silos
Data silos commonly occur when information is isolated within different departments or systems, hindering collaboration and data integration.
This fragmentation leads to inconsistent and outdated data, inefficient processes, and increased risk of errors.
Additionally, the lack of data integration could force your finance team to spend excessive time reconciling discrepancies and manually aggregating data, reducing their ability to focus on strategic planning and analysis.
The importance of a holistic approach to data management
A holistic approach to data management involves considering the entire data lifecycle, from gathering and integrating data to analysing and maintaining it, while considering all aspects of the business, including people, places, processes, and products.
It involves implementing an efficient and comprehensive data management system that quickly and securely makes information available where and when needed.
Successful implementation of a more holistic approach to data management tends to follow three principles:
- Adopt an iterative approach
- Create a standard for data that fits your business needs and processes
- Recognise that people and culture are as important as technical controls and process design.
Holistic data management is crucial for organisations using data-driven initiatives to drive growth and improve decision-making.
It’ll enable better data integration, sharing, and collaboration among different teams and systems.
But this isn’t happening.
Fewer than half of business and technology leaders have a clearly defined data and analytics strategy, the Foundry 2021 Data and Analytics study found.
A haphazard approach can lead to data silos that impede sharing and collaboration. You’ll also end up with inconsistencies due to formatting and update timing issues.
In addition, teams that manually transfer data into spreadsheets and reports may understandably make human errors along the way.
In the Foundry survey, leaders identified data-quality problems as the top roadblock for organisations adopting data-driven initiatives.
“Siloed data operates on different schedules, making processes like revenue recognition difficult and hindering your efficiency,” says Scott Freedman, Director of Marketing for Sage Intacct.
The benefits of an integrated cloud financial solution
Part of your holistic data management approach should be the use of an integrated cloud financial solution.
Adding all of your financial data into a single place ensures your information is consistent, up to date, and accurate.
You’ll reduce the risk of errors when you’re not transferring data between different systems.
Additionally, using one solution allows for better collaboration and sharing of financial information across different departments and stakeholders. You’ll have a more complete and accurate view of your company’s financial health.
With this data, you can make more informed decisions and respond quickly to market or business environment changes.
Furthermore, you can automate your financial processes, reducing the time and resources required for manual tasks. And that means your finance team can focus on more strategic initiatives.
Improving data accuracy can boost business performance
A recent Gartner study found that breaking down silos and sharing data boosts business outcomes. Organisations that promote data sharing should outperform their peers on most business metrics.
By shifting to cloud financial software, courier service Quicksilver Express reduced the time for doing its monthly close by 50%.
Quicksilver can reconcile credit card and bank reconciliations daily, reducing errors and eliminating a week’s manual work. Its overall accounting efficiency went up by 75%.
Family owned investment firm Halstatt experienced similar benefits after switching to cloud financial software. In the past, because valuation reporting took more than 100 hours, the company only had time to do it annually.
With automation, the process now takes just a few hours and is done quarterly, giving executives a detailed view of asset value and costs throughout the year.
Make use of advanced analytics and AI
In this data-driven era, having an accurate and up-to-date view of your organisation’s financial health is just the beginning.
Artificial intelligence (AI) and analytics can help you project future needs. You can adjust your strategies, address challenges proactively, and seize new opportunities.
If you break down data silos, streamline processes and achieve a single source of truth for financial management, you’ll unlock new opportunities to leverage cutting-edge technologies.
You project data to play a greater role in business strategy
With advanced insights, 78% of leaders expect data and analytics to fundamentally change the way they do business over the next three years, according to the Foundry study.
The cloud and advanced capabilities enabled by AI and machine learning will let you get more proactive in mapping the best path forward.
Integrating advanced analytics and AI into your financial management processes can enhance decision-making and uncover hidden patterns, trends, and insights that might go unnoticed.
These powerful tools can identify inefficiencies, highlight areas for cost reduction, and even predict customer behaviour.
You can make data-driven decisions confidently
Scott from Sage Intacct says: “When you have an accurate view of what’s happening today, you can use AI and analytics to project that data and determine future needs and capacity.
“That helps companies deal with unanticipated surges in demand or adjust marketing campaigns based on their performance. Connecting systems through consolidated reporting makes the whole business run more smoothly.”
Breaking down data silos and embracing cloud solutions for financial management is vital if you want your company to grow, succeed, and stay ahead in today’s fast-paced business world.
By implementing an integrated financial solution, discover the Holy Grail of financial management: a single source of truth for all financial data, guaranteeing consistency and accuracy across the board.
This will empower your finance team to make well-informed decisions based on real-time data, leading to better business outcomes.
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