Cognitive Analytics – A Revolution In Planning Budgeting And Forecasting
Finance professionals spend a great deal of their time with the planning, budgeting, and forecasting (PBF) process. It is an important aspect of business planning since it not only provides the management with measurable goals and targets but also offers a broad outline as to how to achieve those goals. In fact, the CFO and the finance department in some organisations can drive business with an active and aggressive planning and budgeting process.
Data analytics – offering a helping hand
Given the importance of the PBF process to the modern day organisation, it is not surprising that a significant amount of resources are devoted to it. The entire process is however very data-centric and its effective use means that it has to be iterative. This requires tremendous resources both in terms of computing power, manpower and time. In order to make the process faster and more efficient, data analytics is generally utilised. Data analytics allows managers to churn out vast amounts of data and quickly gather the insights and information that they need to make decisions. It has truly been a game changer for data-centric iterative processes like budgeting and planning.
Cognitive analytics – the not too distant future
While data analytics has been proven to be rather useful, some innovators are now looking to develop something even more intuitive and radical. They are working towards something called cognitive analytics. The idea is to create a system which is capable of understanding commands via speech or text and then processing available data to provide usable information. So perhaps the day is not too far off when you can just speak to a cognitive data system as you do right now to Siri or Cortana.
Imagine asking a system, “How do I reduce my operating costs for the German subsidiary by 5%?” and the system can go through all the information available to it via the company’s financials, vendor management system, invoice processing system, inventory management system etc. and come back with an answer. The answer would probably consist of four or five steps and an estimate of the possible benefits. There would most likely be more than one option as well.
This might seem like some way off technologically, but developers at leading business intelligence companies are already working on something similar. After all, if Siri can find you the cheapest route to travel from London to Istanbul by searching the internet, why can’t business intelligence software search the local company database and find the cheapest way to transport raw materials from the vendor to the plant?
Preparing for the future
Cognitive analytics will be coming to us in the near future. Even right now, there are systems capable of smart analytics which are already making data analytics easier and faster. However, the key to success is in ensuring the quality of data, accurately capturing relationships between variables along with cause and effect relationships. Cognitive analytics will take the low-end manual grunt work out of the equation and enable managers to focus instead on asking the right questions. In fact, managers will be able to generate tangible value for the organisation by finding creative solutions to everyday problems. Solutions which have already existed but were not visible behind the mountains of data. This is a future which cognitive analytics promises to deliver.
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