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The Importance of Data Insights for Strategic Financial Planning

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

8 min read

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 decisions for the business, and the right tools to forecast and plan 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 in order for your organization to survive.

The Importance of Data-driven Decisions

One of the most critical areas in achieving our strategic goals is the optimization of 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 our sales capacity planning to territory mapping, to 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 75% of companies continue to rely on multiple spreadsheets and homegrown systems—even though we know they’re riddled with errors, and our team has to spend hours locating and correcting broken formulas.

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 depends on the quality of historical data. And for most companies, this means one thing—a massive data cleanup before  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 opportunities for growth. 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.

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 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) Platform helps us do that.

To learn more about how to get started with sales performance management, download our free SPM workbook.