As the economic downturn continues to bite, corporate financial managers are likely to look for every bit of help they can get to free up more cash from within their businesses. Spotting opportunities for further efficiency or for cost savings is never easy—but an ideal tool for doing just that may be right under their noses.
Businesses have been investing in data analysis tools for a while, often using them to spot fraud. However, they can be put to much wider use. The use of data analytics might make the difference between surviving and perishing in today’s economy, according to Steve Gallagher, a partner in KPMG’s Advisory practice in the U.K.
Gallagher estimates many businesses use only about 20% of the full capabilities of their data analysis tools.
“No business should wait until it is in a criminal or crisis situation…before it starts putting these tools to work,” Gallagher said in a news release. “The way in which these tools operate means they can give a handy insight into how a business is operating but can also be put to work in a more forward-looking capacity, outlining possible ‘what if’ scenarios and assessing the risk to the business.”
Possible uses include:
n Assessing a company’s exposure to the stricken financial sector, not just highlighting the risk but quantifying how great a risk it represents and where the fallout would be felt most keenly.
n Helping senior management make better strategic decisions by providing a clearer understanding of a company’s customer base, its “hot” products or its problem markets.
n Improving supply chain processes, optimizing the journey from raw material to finished product by showing the points at which cash is left inactive, tied up in inventory that needs to be moved more quickly.
Source: KPMG International, www.kpmg.com.