What is Finance Observability And What Are Its Benefits?

Raghavendra Reddy
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Bolster up the finance observability concept, its constituents, and its potential benefits for finance teams. Also, know how it differs from traditional KPI reporting.
December 7, 2022

When discussing our activities at Bluecopa with global finance leaders, we've noticed their enthusiasm for our distinctive approach to finance observability. The inquiries span a spectrum from differentiating observability and KPI reporting to understanding how finance teams can extract advantages from it. But, before delving into the depths of finance observability, learning the evolution of the financial paradigm proves beneficial.

While the preceding decades were primarily centered around periodic monitoring and reporting, the upcoming era is characterized by cross-functional problem-solving and continuous improvement. The driving force behind this transformative role is the availability of appropriately formatted data at the right moment.

Given this copious data generated by multiple systems, it's only logical for leaders to desire to exploit this resource. In a perpetually changing business landscape, it's only natural for business leaders to turn toward their finance teams to sift meaningful insights from the noise.

This blog post helps you demystify the concept of finance observability, its fundamental constituents, and the benefits it entails to finance teams. Read further to find more.

What is finance observability?

Imagine having a crystal ball that tells you what has happened, what is happening, and what might happen simultaneously. Or picture a Quentin Tarantino movie – where multiple individual storylines somehow connect into a single grand narrative.

Finance observability is precisely that – and more. 

Finance observability is all about context awareness. The finance team serves as the organization's brain, receiving data from multiple nerve-like functional tools and turning it rapidly into actionable insights through advanced analytics. 

Information is handled in real-time, and cross-functional data is stitched together seamlessly. In short, finance observability does the following:

- Methodically crunch data to decision cycles

- Retrieve actionable insights to drive outcomes 

- Continuously monitor to uncover and prevent risks

The three pillars of finance observability

Finance observability focuses on three broad pillars to transform how organizations use data. These are:

The three pillars of finance observability

#1 Data

At its very core, observability connects, validates, and marries multiple data sources. As a first principle, observability requires centralized data to access and leverage data across systems. 

The data pillar focuses on the following:

- Contextualized data availability 

- Data normalization and standardization

- Single pane of truth

 #2 Analysis

Finance observability focuses on delivering insights through metrics/KPIs (both out of the box and on-demand ad hoc). A metric-based reporting ensures the standardization of metadata structures and rules.

The analysis pillar focuses on the following: 

- Data logic and data relationships

- Contextual insights and reports

- Continuous monitoring and alerting

 #3 Personalization

Information is only helpful in the right hands. Observability focuses on building information cockpits based on user roles and access.

The personalization pillar focuses on the following:

- Data Governance (role-based and need-based access)

- Personalized reporting cockpits

The benefits of finance observability

#1 Finance turns storyteller

Let's face it, as finance leaders, you are more and more expected to understand and solve business problems requiring collaboration from other departments. With finance observability, you get a 360-degree view of the organization through data from all systems. This lets finance tell the entire story about business performance and events.


💡Based on a CFO study conducted by Everest in 2022, 62% of CFOs agreed that improving data management, including data maintenance and organization-wide visibility is a high-priority item.

#2 Outcome-oriented business partners

Automating rule-based KPI computations and reports allows finance teams to focus on what is needed to do the most – becoming the decision experts. Advanced analytics help decode the root cause faster and drive business action.

Access to operational data brings finance closer to business, helping everyone make the right decisions at the right time.  

#3 Democratized insights, centralized controls

Gone are the days when data was not available or erroneous. Observability aims at putting information in all hands, with adequate security guardrails.

The metadata structures and definitions are all controlled centrally, making finance teams the data steward for the organization.

💡Based on a Gartner study, 73% of finance functions favor a centralized tightly governed source for data.

#4 Faster time to value

Finance leaders are ROI driven. They need solutions that are faster and simpler to be adopted. The right observability solution should have a plug-and-play approach for that reason. 

Where are you on your journey to finance observability?

If you're still intrigued by the concept of finance observability and want to experience its benefits firsthand, we encourage you to explore Bluecopa. It is a finance observability platform built for modern finance teams and a force multiplier for CFOs.

Discover how Bluecopa can transform your approach to financial observability, streamline your financial processes, and enable your team to make data-driven decisions. And don't forget to get yourself a demo.