Data at the heart of company management during the pandemic – Decisions rather than reflexes

The confinement imposed on companies forces them to question established models and tests the capacity of their decision-making systems. The real-time analysis of the situation to develop the different scenarios is more than ever at the heart of the subject.

There is no doubt, For several days now, containment requires, the management of companies of all sizes are on the go. The sudden awareness of the pandemic and the obligation to protect employees by drastic health measures, telecommuting or stopping activities calls into question all the established models.

In particular, the financial departments “re-activate” the survival reflexes of companies which aim to preserve cash, in the short and medium terms. But should it be reflexes? Or rather of decisions taken quickly which are based on data measured in real time, made reliable and reflecting, as closely as possible, the different flows of activity of the company?

Information systems, and in particular decision-making systems, are under severe strain in this context . How do they contribute today to business management and decision-making?

Without a doubt, for many companies, the size of the cockpit is flying from that of a passenger plane to that of an airliner. The smallest department of the company is put under observation.

From the front office to the back office, all sources are used to ensure the most perfect feedback of situations and behaviors. Cancellation of appointments, order intake or, on the contrary, maintenance of commercial activities, but at what level? How to ensure the supply of production units? What level of productivity can they ensure, taking into account the necessary sanitary measures? Can supply chains, which are largely outsourced, be insured? Obviously, the credit management function of the company is also widely mobilized … All these questions are causing an upsurge in data consumption levels and Business Intelligence solutions are therefore widely mobilized.

The level of maturity of companies in mastering their operational data will undoubtedly constitute a strong differentiation between companies, allowing them to highlight the potential risks of rupture with the best acuity. Financial departments have been, as we have known for a long time, driving force in the digitization of processes. Today, we understand why: digital processes are more capable of providing measurable information, in real time and correctly feeding the dashboard.

The challenge of piloting , synthesizing operational information in real time, is more relevant than ever to allow finance departments to provide executives and managers with the most precise economic view and try to measure the impact direct on cash .

Simulation is better than prediction

If the prediction is complicated, the simulation can facilitate the decision. This is the second challenge for corporate decision-making systems: their ability to contribute to the development of scenarios of activities and operations aimed at ensuring, as long as possible, the operating capacity of organizations through cash .

For many years now, the acceleration of economic cycles has led companies to regularly question their business models. The International Observatory of the Performance Manager DFCG-Decision Performance Council, published last December, indicated in this regard, a very strong increase in the time spent in Revision (Rolling Forecast) . And this study also indicates that, for the next few years, the trends will focus on “animation with operational staff, business reviews and forecasting” .

There is therefore no surprise, but here again, the capacity of organizations to implement, with the greatest speed, the various scenarios of “survival”, then of resumption of activity constitutes a distinctive element of companies. And the established models will not be of much use, as the situation is considered uncertain.

A single scenario will not be enough, requiring great agility in order to consider several hypotheses and calculate different possible paths.

The management control of companies takes all its sense in this field as it sheds light in detail on the knowledge between operational flows and their financial translation. The analysis of costs, revenues and margins in each of the company’s businesses must provide economic metrics on which these different scenarios will be based.

Management control provides particularly relevant information in times of crisis: it provides a better understanding of the variability of expenses in all of the company’s positions, but also the profitability of activities, step by step. This is particularly critical in the current context of income uncertainty. Its undeniable role in managing the performance of organizations certainly contributes to a better assessment of the risks and scenarios to imagine.

Are SMEs and large companies well armed?

Are the largest companies better equipped than the small ones to face the inevitable economic shock that is brewing? Not sure. Of course, the means are not the same, but if you look closely, the stakes are also very different.

In the 2019 survey on the priorities of the finance departments conducted by PwC and the DFCG, the financial players of large companies admitted that their priorities were to simplify information (75%), refocus and limit the number of reports (63% ) while enriching their reports with predictive and prescriptive data (63%).

SMEs / ETIs asked about their priorities defined their needs to enrich their management model with more details and dimensions (53%), to integrate non-financial data (45%) and to implement new dedicated tools performance management (41%).

While the former are fairly well equipped, but faced with the challenges of simplification, it seems that the latter still have room for improvement in mastering their data and measuring their performance. However, their size can certainly enhance their agility to react.

We can clearly see how the balances, in terms of business intelligence or decision-making system are fragile and must be perpetually challenged to best serve the needs of the moment. Agility in this area is more than ever an asset. There is no doubt that the strengths and weaknesses of these decision-making systems will be the subject of detailed analyzes after the crisis.

The marketing of many publishers of business intelligence solutions is always developing new concepts, in search of innovative solutions, with high added value and we understand this. The exponential growth of data in the enterprise is a major challenge in an increasingly competitive world.

But let’s not forget the good old definitions of the past: BI is above all “the right information to the right person at the right time”. This is a definition that takes on its full meaning now.

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