Predictive Analytics and CFOs Go Hand in Hand
Predictive analytics is an immensely helpful facet of CFO’s role. For those unfamiliar, predictive analytics is a practice used by boards that extracts pertinent information to determine trends and behavioral patterns relating to the past, present and future of a business–though it is predominantly used for forecasting the future of a business.
Overall, two of the most compelling reasons to implement predictive analytics is profit and growth. With a forward-thinking leadership in place, predictive analytics help the board set short and long-term goals as it strives to reach its next milestone in business.
When harnessed properly, predictive analytics begin to embody the principles of its board. Without implementing this sort of analytics, it certainly is hard for a board to consider itself forward thinking. By looking at its entire history and setting a course for the future, a board demonstrates how they understand the business at an intimate level.
With that knowledge in hand, the business’ entire operation can be accurately scrutinized. From marketing efforts to supply management, the CFO is able to pinpoint on areas of the operation that could benefit from refining.
However, predictive analytics go beyond profit and growth potential for a business–it also creates new questions. These questions help a board, and specifically its CFO, hone in on issues that could become pressing in the near or distant future. By properly zeroing in key statistics now, the board proactively seeks out answers well ahead of crunch time. Furthermore, with forward thinking implemented there is less room for uncertainty and gray area. By reducing these hazy areas, the business can continue to move forward as confidently as possible.
If your company doesn’t utilize predictive analytics, it may be worth exploring to see why. Whether you are a business with a clear growth plan established, or one looking to make the right moves to succeed, predictive analytics could be the key to pointing you in the right direction.
Originally published on HenriSteenkamp.com
ABOUT THE AUTHOR
Henri Steenkamp is a finance executive with over 15 years of experience in his field. Steenkamp serves as chief financial officer, treasurer and chief compliance officer of Saratoga Investment Corp. (NYSE: SAR), a provider of financial solutions to middle-market companies, and Saratoga Investment Advisors, LLC. His early success earned him a place on Treasury & Risk’s Top 40 Under 40.