Understanding Business Changes Through Operational Metrics
Forecasting is not just about Financial Results
We believe that regular forecasting is the key to monitoring and addressing shifts in the business, regardless of the driver of the change. We use one technology platform across the business globally for budgeting and forecasting that is synched with our financial reporting software. With this efficient infrastructure, we are able to quickly compare actual results to projections and then determine how those changes may impact the rest of the year. It is important to note that forecasting is not just about financial results–it is essential to also include the key operational metrics in the process to fully understand changes in the business. Operational metrics, and for our company that includes tickets sold and fans attending our events, often times give a different indicator than financial projections so looking at both we can highlight any inconsistencies, clarify projections and limit surprises during the year.
"The skill is to determine what part of the data matters and then make that accessible and easy to absorb, which helps operations make sound decisions quickly"
Identifying What Data Matters for Quicker Decision Making
The most important aspect of improving finance’s role and impact is to be a partner to operations. The most effective way to build this partnership is through providing insights that help run the business and influence decisions. These insights can include key financial and operational metrics, historical impacts and future
projections. Finance’s challenge in this is often data overload and it is important to not deliver too many reports and statistics. The skill is to determine what part of the data matters and then make that accessible and easy to absorb, which helps operations make sound decisions quickly. Participating in the analysis which supports the decision process along with assisting in understanding the results of the business will drive the team’s influence and impact.
Consistent Platforms for Information are Key
Consistent platforms for information are the key in my opinion. All operations using the same financial reporting system and the same forecasting system and other consistent tools allows a global company to obtain information quickly, drill down to analyze results further, if needed, and ultimately pull together the data that matters for operations and disseminate that timely and consistently. How you do that and what tools you use depend on the specific needs of the individual business. It is important to take advantage of current technology to improve finance processes and reduce costs including cloud storage and less reliance on spreadsheets.