Much has been written about the customer journey and the customer experience along the way. The thinking goes that if we can empathise more closely with what the customer is experiencing, then we can better serve them with product and services. Indeed, FSN’s research, The Future of Budgeting, Planning and Forecasting shows that 70% of CFOs regard customer relationship management data (CRM) as the most useful source of insight after the general ledger.
So, if customer data is that powerful in the hands of the CFO, how much more so would similar financial and non-financial data about the supply chain and employees? If coalescing information about customer behaviour, buying patterns, product choices and propensity to buy can inform better financial forecasting what could having information about employee satisfaction and potential attrition rates have on financial outcomes?
The possibility of linking operational to financial and other experience data holds limitless possibilities for further understanding and enhancing performance yet it is underexploited. FSN found that only 11% of organisations are using non-financial data more than they were 3 years earlier.
One reason is that bringing experience data together presents formidable challenges. It’s not just about data governance and ownership, but also being able to transcend functional silos and re-imagining processes so that they stretch, uninterrupted across the enterprise. And that requires investment in the very latest digital technologies and architectures that allow a variety of data (structured and unstructured) to be brought together in one accessible environment.
Whereas 20 years ago the most useful data resided in financial systems, nowadays it is the complete opposite. The most insightful data lies in non-financial data sources, that are unlikely to conform to accepted accounting standards, are difficult to codify and highly variable in volume and availability. Yet these, non-financial elements of experience data can be the most valuable in terms of looking out on the time horizon and managing future performance. The same FSN study mentioned earlier, shows that businesses that make use of non-financial data are more than twice as likely to be able to look out beyond one year.
For example, a manufacturer of men’s tissues, discovered that google analytics could give forewarning of sales demand as individuals increasingly searched for remedies for the common cold. The manufacturer could track the intensity of relevant google searches and follow them across different geographies as symptoms spread. In another example, a hotel group used weather forecasting data and the ‘Internet of Thing’s, (in this case sensors on buoys in the sea) to predict wave swell and forecast demand for dinghy and surfboard hire, adjusting its staffing levels up and down as needed.
It is these fascinating combinations of operational, financial and non-financial data that contribute to experience data, allowing modern finance teams to feel their way through business issues in a way that was previously unthinkable and play a more complete and valuable role as business partner, strategist and catalyst for change.
You can hear more about data-driven experience management in a short video clip here.