Business insights can change how you operate to hit financial goals and support strategy.
They can also broaden your view of what to create for greater value to the customer. Business intelligence solutions that deliver real-time, contextual analytics are essential for today’s evolving CFO role. They expand beyond financial figures to answer questions like:
- Where can supplier expenses be cut without adversely affecting product performance?
- How much more revenue will we gain from a particular new channel?
- How much is a product driving customer expansion?
Multidimensional financial analysis enables informed and decisive leadership, providing business executives with 360° visibility and actionable insights into both financial and operational activity in a business. The analysis adds clarity and broad context to intelligently navigate a business toward the future.
Financial figures reveal only part of the story
Financial statements are valued by investors and creditors, to understand how well management can generate profit and optimize cash. Statements also help them assess potential risks and opportunities. But statement guidance for internal stakeholders is less insightful.
Financial figures do not give line leaders important feedback on how well operations performed or the likelihood of hitting next quarter’s targets. Similarly, financial statements do not provide proof to the CFO and the executive team of how well operations can support strategy and deliver value to the customer.
Rich insights into business performance reside deep in the data. The challenge is unlocking it.
Multidimensional analysis answers the “how” and “why”
Multidimensional analysis is a means to measure and analyze your business in the same fashion in which it grows and operates: multidimensionally. It offers business visibility from all angles — from a deep look into a business unit or a specific transaction to a view through a process like order-to-cash or across the entire value chain.
The multidimensional analysis also enables visibility by time (past vs. present) and by external influences like customers, suppliers, partners and market conditions. Slicing and dicing of data lead you on a path of real-time data discovery to answer a specific question, uncover the unknown, guide decisions and formulate strategy.
Technology is key to converting your business data and aggregate financials into actionable insights. It starts with a solution like an ERP — which consolidates financials with operations data — to centrally manage accounting, sales, CRM, inventory, e-commerce and more in one system. This ensures transactions are recorded as they occur and are automatically available throughout the system for real-time views and reporting by all affected business units. Next-level Online Analytical Processing (OLAP) makes your business data more manageable and accessible for quick, efficient analysis and reporting.
Applying OLAP dimensions to business data is another way to enhance your understanding of day-to-day activities while streamlining the general ledger. Dimensions are tags used to group or filter data by organization details (i.e., location, subsidiary, division) or by revenue drivers (i.e., customer, product, channel). More dimensions enable deeper discovery and insights.
With multidimensional reporting, a transaction record can be linked to an aggregate total and the process between the endpoints can be analyzed. In other words, it’s possible to centrally view and manage both performance outcomes and processes.
Unlimited potential for business application
The multidimensional analysis provides rich contextual insights to:
- Explain a financial statement figure
- Quantify a revenue driver
- Eliminate inefficiency
- Look for cost savings
- Track a breakdown in execution
- Explore an opportunity
- Learn from success
- Plan for innovation
These types of insights can lead to definitive answers. They can surface new questions, which may lead you down a new path with new opportunities to explore. That is the real value of multidimensional analysis — it can lead you where you need to view, if you ask the right question and are open to the unexpected.
Faster and simpler decision making
While perfect knowledge is unattainable, real-time contextual insights provide you with clarity and confidence to make data-supported decisions to leverage an opportunity, avoid risk or prepare for what is next. You no longer need to wait on the financial close cycle, or for an analyst to download, merge and calculate data from different sources. Ad hoc reporting by analysts and decision-makers enables the agility to pivot even in volatile markets.
Promote a data culture
Multidimensional reporting can render value for every role, where data is part of every decision and process. An accounts receivable (AR) analyst could analyze and report on key customer payment activity to identify and address any potential risk. A purchasing manager could discover which suppliers are more reliable and when it is advantageous to switch orders for high-priority or rush orders.
Every business unit in your company can be transformed by the guidance, continuous measurement and accountability that come from multidimensional analysis and reporting.
To learn more about NetSuite and how it can help you create a data-driven culture, watch this on-demand webinar that spotlights multidimensional financial reporting.
Discover how multidimensional analysis can help your business – contact us today!