The Importance of Data Insights for Strategic Financial Planning

Learn why finance leaders need key data insights and data-driven decisions for successful financial planning and forecasting from Xactly CFO, Elizabeth Salomon.

What does it take to be strategic? The answer might vary depending on who you ask within your organization. From my perspective as a Chief Financial Officer, it often means helping choose the best path for our company to meet our overall goals.

This requires a clear understanding of where my company truly stands, access to the right data to make the best business decisions, and the right tools to forecast sales accurately.

Today's business landscape is moving incredibly fast, and goals are becoming more aggressive as organizations struggle to keep up.

As a finance leader, I've seen firsthand that you need to move quickly to compete and make smart business decisions for your organization to survive.

The Importance of Data-Driven Decisions

One of the most critical areas in achieving our strategic goals is optimizing sales performance. To make the right decisions in this area, we must have the right information.

Data touches every part of our sales organization and informs everything from sales capacity planning to territory mapping, forecasting, and incentive design.

But you need more than just access to data. We all have data-but we need access to accurate data insights (ideally, located in one place) to make smart decisions. On top of that, you need to be able to analyze your data on a granular level to gain strategic insights.

The need is inherent, yet more than 94% of decision-making spreadsheets contain critical errors-which can lead to moderate financial or operational losses over time.

Integration of Financial Planning and Business Strategy

Sales forecasting uses historical sales data, market trends, and other factors to estimate future revenue. The accuracy of this process depends on the data available and the capability of the data analyst.

Traditionally, sales forecasting has been done by hand with pen and paper - or a spreadsheet. This simple approach to sales forecasting leaves room for human error and mountains of data being left unused.

Accurate and efficient sales forecasting opens organizations up to advanced strategizing. If companies can use more of their data and learn from it, they can identify points of weakness to improve on in the next quarter.

They can also identify strong points and standardize effective operations. Organizations already have access to their data, but most miss the mark on using it to their full advantage.

Tools and Technologies for Financial Data Management

Almost every running business has data, but how much of that data is being used? How much of the data is accurately being applied? More often than not, the answer is that the data is just sitting around and collecting dust.

Automation is the key to utilizing data to its full potential and improving the organization's overall functioning. This form of automation does not replace the hard-working sales team.

It equips sales teams with the tools they need to take their revenue-earning to the next level. Sales Performance Management drives revenue by finding points for improvement and incentivizing sales leaders to achieve their goals.

Platforms that automate SPM provide consistency in data, cross-departmental collaboration, and continuous learning.

Data Governance and Quality Control

The key to a good sales strategy and effective data governance is having adequate data and knowing how to use it. Automation introduces opportunities through its efficiency, accuracy, and productivity.

Automation for Sales Organizations can reach new sales potential with the application. Artificial Intelligence (AI) can process large quantities of data faster than ever before.

Businesses no longer need to leave huge stacks of data for their salespeople to process. Automation can take over the responsibilities and let the sales team do what they do best - sales.

Automation removes the time-consuming, erroneous tasks of data analysis, while also providing accurate insights and offering new strategies. Additionally, the automated sales forecasting and sales performance management can continuously work with your data.

Artificial Intelligence (AI) can keep track of data in real-time, which gives businesses agility in making quick adjustments when necessary. Automation lowers the chance of inaccurate data and misuse of data.

It has the potential to provide data-driven suggestions based on trends that people may not be able to detect on their own. It gives salespeople the information they need without sacrificing intuition or quality.

Financial Forecasting and Scenario Planning

Intelligent Revenue and automated Sales Forecasting can provide an overhead view of the sales performance and the business as a whole.

AI can process data and identify specific factors and trends that can enable an organization to improve quickly and efficiently. It provides a centralized platform for data entry, collaboration, and planning.

The Challenge: Data Accuracy

"Your analysis and planning are only as accurate as your data."

Data accuracy is crucial in every aspect of your organization. When it comes to sales and financial planning and forecasting, the quality and depth of your assumptions depend on the quality of historical data.

For most companies, this means one thing-a massive data cleanup before being able to use the data in an optimal way for strategic financial planning. I know the struggle all too well.

Throughout different roles in my career, I've taken part in my fair share of data cleanups. I'm not alone. In fact, I attended a recent meet-up of CFOs, and more than half of the companies represented were currently going through data cleanups.

It's generally a cross-functional significant effort of your team to make sure customer and prospect data is clean and easily usable.

Once the data cleanup is done, it's crucial to make sure processes going forward support strong data governance. No one wants to go through this multiple times!

How Automation Helps with Strategic Financial Planning

Using automation tools, I've worked with the Xactly leadership team to centralize our data and create a single source of truth across our organization for financial planning.

This has allowed my team to peel back the different layers of our data to gain a granular view of our overall performance.

Identifying Trends and Opportunities

"Access to accurate data insights for decision making is the difference between ok and great businesses."

With all of our data in one place, we can dive into data on a deeper level across our entire organization. This gives us key insights that you can't truly see if you're not examining your data holistically-which is invaluable in my role and, honestly, makes the difference between ok and great businesses.

Up-to-date, accurate data helps you optimize your plans, identify trends across your entire customer base, and see growth opportunities. Ultimately, it allows your leadership teams to be flexible and proactive when it comes to the plans they make.

Without the ability to change your strategy on the fly or optimize your current plan to reflect market changes, you are setting your business up to fall behind the competition.

Risk Management and Contingency Planning

Every market has its ups and downs. Being able to warp and weft in unpredictable market conditions is essential for a company's survival.

You can set an organization to function for business as usual, but how do you plan for something that you don't know is going to happen? Automation allows organizations to make necessary changes with ease.

It is impossible to accurately predict how the market will be every single day, but AI can enable companies to be ready for any change. Having the capability of looking at the entire business landscape of a company and guiding how it can adjust at a moment's notice is invaluable.

Continuously Adjusting Plans and Forecasting

An important thing to remember is that you may need to make multiple big changes to your sales plans throughout the year. Most companies set a plan at the beginning of each year and leave it- but things change.

The business environment is changing constantly and quickly. Whether it be in your company, the market, or other external factors, change is inevitable-and you need to be able to continue to update sales plans in real time. Having a tool that makes this continuous planning easy is extremely helpful.

Focusing on Strategy, Not Tactics

At the end of the day, having the right information at the right time and in the right way supports me in being able to effectively serve the business. Automation helps ensure that my team and I have up-to-date access to accurate, consistent data-allowing us to plan, forecast, and adjust in real time.

When you can look at this data holistically, you can identify problems early and find opportunities to continuously improve your sales plan and forecasting.

Centralized data helps align your entire organization-and implementing a sales performance management (SPM) platform helps you use your data more strategically.

In my tenure at Xactly, we've been able to align with our sales team more closely thanks to our single source of truth. The Xactly Sales Performance Management (SPM) Solutions helps us do that.

Concluding The Importance of Data Insights

Strategic Financial Planning is the key to success for any company. Data is one of the most valuable resources today. Data automation reduces inaccurate forecasts, while providing advanced data insights.

Having the ability to process as much data as possible and offer insights to optimize sales performance can turn a good business into a leading business. To learn more about how to get started with Xactly's sales performance management solutions, download our free SPM workbook.

• Forecasting
• Incentive Compensation
• Sales Performance Management

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