In our recent Future of Finance breakfast, senior finance leaders met to discuss the key role that Finance plays in driving insight.
CEOs are increasingly looking to their CFOs for answers to key business questions: How can we enhance the value we bring to our customers? What pricing strategies should we deploy? Which products are truly profitable? Which new markets should we target? Yet, in truth, too many organisations find themselves “data rich and insight poor”, says Mike Clark, VP Finance and GB CFO at Coca-Cola European Partners. Insights with the power to increase revenues and drive profitable growth are lost in a fog of data.
Our research shows that more organisations are investing in data analytics than in any other technology. For finance leaders ready to step up, there is an exciting opportunity to do far more – and make a shift from Finance as the function that answers the questions to the function that sets the questions and drives the business agenda.
Driving insight-led performance improvement
One organisation that has successfully invested in their analytics capability is Coca-Cola European Partners (CCEP). The organisation markets, makes and distributes soft drinks across 13 European countries. With support from KPMG, CCEP established a reporting centre of expertise and more recently used retailer, consumer and internal data to uncover insights that drive top line growth. Mike Clark joined our most recent Future of Finance event to talk to finance leaders about the experience.
Focus drives results
Being completely clear on the business question is key to getting the right insight to make the best decisions. Using a logical, structured approach to analytics has allowed CCEP to respond faster to adverse events and outperform their competitors.
When a new levy on sugar-sweetened drinks in the UK was introduced, CCEP wanted to understand the impact on volume, revenue, profit, market share and penetration. Clear analysis helped focus on these impacts, using market and internal data as well as research into likely consumer behaviour to provide the right insight. This insight allowed them to make decisions on pricing changes and pack sizes to mitigate the impact of the levy.
During a recent (and rare) hot summer, there was a shortage of CO2. Insights from the supply chain helped CCEP take decisions on reducing the right product ranges, minimising supplier disruptions and managing customer expectations, leading to an increase in market share as a result.
Be “humble and paranoid”
Having a lot of data available and using the latest technology doesn’t always mean that the right insight will be delivered first time. All organisations are currently struggling with making use of all the data available and need the humility to recognise what data they use well and what data they don’t.
Challenging the analysis and asking yourself “where could this be wrong?” will help to improve the insight and get to an even better answer. While this challenge does provide significant benefit, it needs to be balanced with the need to make timely decisions to avoid “analysis paralysis”.
Give yourself time to think
For CCEP, the analysis on the impact of the new levy on sugar-sweetened drinks needed business partners to step away from the day-to-day tasks and free up time to think about the bigger picture. This has been enabled by their data and reporting centre (in Sofia, Bulgaria) that delivers routine performance analysis, allowing the business partners to develop the strategic analysis and insight that helped CCEP make the right decisions.
Invest in your data
Our research shows that two-thirds of CEOs say they have ignored the insights provided by data analysis in the last three years, because they have contradicted their own intuition or experience. Getting the business to challenge, and not ignore, data-driven insights will only happen if they trust the data. To build that trust requires accurate, consistent data, uniformly defined across the organisation underpinned by strong master data management.
Build new skills within Finance
Finance has a key role to play in driving insight but can only do this effectively if they are ‘in the business’. Finance can’t just comment on performance or challenge everyone – it needs to be part of the team and the solution. This means developing a new set of soft skills and technical capabilities that will take finance away from its comfort zone, stretch their thinking and ultimately redefine the role it plays in driving the business forward.
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