This month’s meeting of the London financial planning and analysis (FP&A) advisory board saw practitioners debate whether fancy business intelligence (BI) software tools are a wise or even necessary investment. The general consenus was that boardroom members often don’t want to see complicated graphs, instead preferring to see the numbers in a flat 2D table.
“I’ve worked for a chief financial officer [CFO] who hated graphs,” said one FP&A professional. “As a finance person he wanted numbers, not graphs. He even got his PA to print off a dynamic clickable dashboard I produced! A lot of a presentation depends upon who you are presenting to. I’ve certainly adapted my technique and tools depending upon who is listening.”
Conversely, another member had worked for an iPad-savvy chief executive (CEO) who wanted interactive visual aids and graphs, so he responded accordingly. Over time such a data-heavy visual approach spread to the rest of the company.
“It’s not just the audience that is important, the author is too,” cautioned another member, stressing that data visualisation is about spotting trends, interpreting data and finding business opportunities – it isn’t just a presentational approach. Presenting a data story well and understanding it are two sides of the same coin.
Choosing the Time and Place
The discussion progressed to when and where to use a bar or pie chart, scatter plot table or other data visualisation tool, and in what context. One member electronically shared a good decision-tree template he had used to help him make a decision about what charts to use, where and when.
The issue of whether to first have a hypothesis that can help you explore the data, avoiding a ‘garbage in, garbage out’ scenario, or whether to simply let the data lead you to some unexpected conclusions and strategy ideas was debated next. Some members advocated the latter approach, while others warned about the dangers of correlation and causation not being the same thing. This is where the human element and the skills of an experienced FP&A practitioner can come into play in terms of deciding what financial data is relevant and useful and what is “just noise”.
The topic of whether a FP&A or IT professional is best placed to implement an over-arching data visualisation methodology at a firm was also hotly debated. One member insisted “it should be us that runs such a project because we understand the numbers”, while another said “our skill set is not that of a data scientist”.
A collaborative approach, with each side contributing their respective skills, is probably the best way to approach the implementation of a data visualisation project. “This will have the added benefit of avoiding departmental data silos,” concluded a member.
- More information on the corporate FP&A professional certification is available here. AFP is the supporting organisation behind gtnews and the FP&A Club, which has already held events in London, Moscow, Kiev, Stockholm, Geneva, Dubai and various other international locations. You can also sign up to the AFP FP&A e-newsletter or visit the FP&A website. On the gtnews website, interviews are available with various London FP&A Advisory Board members under the dedicated FP&A section.
- To contact the FP&A Club about free membership for finance professionals, or for more details on forthcoming international events, please email Larysa Melnychuk or join the LinkedIn FP&A Group. The London FP&A advisory board meets next on Thursday 22 January 2015 with possible topics under debate including risk-adjusted planning; big data; or how FP&A is developing differently in different regions. An announcement will be made on the Club website closer to the time. A FP&A conference is also scheduled for 19-20 May 2015 in Amsterdam, Netherlands, next year. Those interested in speaking should contact Larysa Melnychuk.
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