A Complete Guide to Actionable Insights: From Data to Strategy

Matthew Dziak

Buzzwords and phrases can be like a great song you hear time and time again. Sure, you enjoy using them, fall back on their familiarity and common understanding amongst peers, but they can become overused, by no fault of your own of course. 

This can especially be the case in business and finance. In this post, we spotlight one specific phrase you hear in business time and again, actionable insight

What is Actionable Insight Exactly?

Actionable insight is a catch-all phrase to describe strategic information and details that drive the decision-making process. It is insight extracted from deep analysis that provides context revealing the how and why of a result. 

Actionable insight is used not only by finance professionals but across the enterprise when working towards business objectives. These insights are essential to the success of a business because it reveals a path forward to identify and ensure scalable strategies to support desired growth and targets. 

Finance leaders need for more accurate and automated processes

Turning Your Data into Actionable Insight 

So, how do you uncover actionable insight? Well, like many things in financial planning and analysis, it all starts with reliable, quality data. Quality data is data that is reconciled, accurate and structured for consumption in preferred business intelligence and FP&A tools, such as Excel, Power BI and FP&A Platforms. 

To conduct strategic analysis that leads to action, you’ll need to aggregate your data to report on. This is often a manual and laborious process that could otherwise be automated with direct integrations to your systems for greater efficiency and accuracy. 

Once you have your reports and actual metrics for the month, you can compare that against the targets in your annual budget projections to determine the variance, known as variance analysis. 

"Finance should be the governor of strategic company conversations. Companies that have high-quality conversations are going to perform.  When you have a discussion about your choices, someone is taking those strategic choices and incorporating dollars and cents implications." — John Baule, CEO and co-founder of FutureView Systems

If you seemingly spend the majority of your time aggregating and structuring data from multiple systems manually to create necessary management reports and analyses promptly, you probably need additional FP&A tools to expedite the process and give you more time for deeper analysis. 

When conducting financial analysis, it’s imperative that you start with identifying the questions you need to answer and solve for. Having a premise to work from will help guide your analysis and focus on the most critical matters to help achieve the targets. Your goal is to provide business partners and management with context to the results and explain the how and why. 

Questions to ask yourself when analyzing your actual performance metrics: 

  1. Has there been any new sales and marketing campaign spend?
  2. Did we expand new features or add new products? 
  3. Did we add sales and marketing headcount?
  4. Were there any new partnerships or referral programs recently? 
  5. Are there any seasonality factors I should consider? 
  6. What potential risks can occur and how might they impact results?
  7. What opportunities have the potential to compound?

Trying to answer these questions as part of your analysis is difficult in Excel. Sure, you could do it, the same way you could use a wrench to hammer in a nail, but at what cost? Excel alone doesn’t lend itself well to drill-down details at a departmental or campaign level. FP&A Software and Platforms on the other hand, offer drill-down capabilities, with granular details into metrics to  greatly expedite your analysis and slice-and-dice your data in newfound ways. 

Actionable Insights Examples

When we think about outcomes in finance, KPIs are one of the first things that come to mind. KPIs such as gross margin, return on equity, and other metrics found in traditional financial statements and management reports can be surface level at times. These metrics, while necessary, don’t tell the entire story by themselves because they lack the context to explain why. 

To generate actionable insight that drives strategic conversations and decisions, you not only need data, but additional granular details of expenses, campaigns, vendors and other descriptive information. This level of detail requires FP&A Platforms with additional functionality and data control than Excel and other tools. 

Some examples of actionable insights for finance and data analysis teams include: 

  1. Recognize opportunities where certain accounts and customer advocates are candidates for referrals or upselling additional functionality or products.
  2. Pinpoint revenue by department during given periods of time and uncover what top performers are doing differently. This might require you to collect additional internal information, but the work will be well worth it. 
  3. Examine results of marketing and advertising spend, their correlation and influence on the pipeline or sales growth. Was additional resource allocation to a given channel spurring more leads? If so, identify the campaign specifics — it’s likely worth doubling down on.
  4. Review actual performance for the past couple of years to see which months perform best. Use knowledge of your industry, or seek support and drill down deeper to see why this is the case and if additional resources should be allocated leading up to those time periods. 

Notice how these examples include specific details and unique insights. They are not simply metrics or company performance results and KPIs. They are the driving force behind those results. This is what you’re after in your analysis. It will require additional information, and you'll need to ask yourself how and why outcomes occurred to extract the insight you are after.

When delivering your analysis to the CEO and management, it’s best to put it into a presentation or deck and include easy-to-understand visualized data and metrics and your specific insight, suggestions and takeaways. You must be willing to master the skills of being a great storyteller, one who pinpoints the drivers of outcomes and conveys a relatable message for all to understand. If you aspire to be a CFO, this is one of the pillars of success. 

Actionable insight: guide for successful finance teams

Prescriptive Analytics and Insight

There are three common analytical concepts used in Finance: descriptive, predictive and prescriptive. For more, we did a deep dive into each of these analytics in finance in a previous post for you to explore. 

For this post, we want to focus on prescriptive analytics. You might ask yourself why is that? 

Within this hierarchy of analysis in finance, prescriptive analytics sits atop the rest. This is because prescriptive analytics incorporates data points, insights and trends, and suggests ways to optimize the course of action to improve outcomes. 

Essentially, the output of prescriptive analytics is, in fact, actionable insight. It is the “suggestion” aspect of the analysis that offers the insight needed to make truly informed decisions. 

A Rapid Finance Transformation Awaits

In successful companies, Finance is the strategic leader of the organization, infusing every strategic discussion with insights necessary to make impactful decisions. It’s not enough to simply measure your Company’s performance, you should impact it. 

We encourage you to take a look at FutureView Systems. Our software tools and finance solutions not only include robust technology, but incorporate proven finance methodologies developed through years of real-world finance experience.  We've developed integrations to a range of systems and data warehouses and have tailored solutions to maintain the unique structure of each system, while consolidating it for reporting and analysis in our Platform.

Looking to create a high-impact finance function and transform your Company? We would love to speak with you. Request a demo to learn more.

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