Companies have more data than ever at their disposal. But knowing how to interpret this data to inform strategic and operational decisions is easier said than done. And organisations are grappling with how to fuse together meaningful data from a plethora of systems.
Often the responsibility falls to finance, because it's numbers. But these numbers aren't just financial - they come from all areas of the business.
It’s here that we can expect the world of decision support to come into its own. This function will be made up of a number of different skills. There will be finance expertise; data specialists who can find patterns and theories in the numbers. But then you need people who can paint that picture and explain the patterns in the numbers to the board.
Currently, the decision support function is still in its infancy. Just 27% of companies have a dedicated decision support function, according to BIE's Finance and Succession Planning Survey. Proving the heavy reliance on finance, 75% of these were being led by the CFO. But perhaps the CFO isn't the best person for the job.
Interpreting the data
Companies are generating more and more data from nearly every function in the business, from sales and marketing to HR. Bringing this all together and analysing what it means for your commercial and strategic goals is important for companies who want to maintain a competitive advantage. You need people who can join the dots, find patterns and then package it into something meaningful for the board.
Take a retail company for instance; a large upmarket department store. Sales and marketing will have data on footfall, store performance, as well as customer demographics and behaviours, and HR will have data about the staff. This then links to talent management and making sure you’ve got the best sales personnel in the right areas at the right times to upsell. And if a significant proportion of your customers are from a specific country, let’s say Russia, maybe you need a Russian speaker to improve their experience. But the finance function isn’t going to be analysing all this.
The point is, it comes down to not only numerical performance but people performance management, product performance management, sales, marketing, location, and being in the right place at the right time. All this information can be processed and analysed by a decision support team, then interpreted and told as a story to the board so they can make well-informed strategic decisions for the company.
The future of decision support
As organisations look to be more disruptive, we can expect to see teams being created to deliver across decision support and performance management. These teams will be made up of talent from different functions (finance, sales, HR, BD, marketing), who can analyse the operational data and people performance metrics, along with the overall business performance from a financial numbers perspective. They will then be able to present the strategic overview to the board.
The decision support function will be made up of data experts, more than likely with a numerical background, as well as strategic and commercial analysts who may come with an MBA. These are the people who will be able to think about what levers need to be pushed and pulled to give the business a competitive advantage. It’s numerical, yes. But it’s also operational. It involves understanding how to read into and use the data to maximise the competitive position of the business.
The decision support function will always need people who can mine and crunch the data and then analyse underlying trends. This specialist team will then advise the CEO and the board which levers they can push and pull to take the business forward to achieve the 3-5 year plan. In ten years’ time, this function will be less of an FP&A function, and more decision support will be in place.