The foundation of Finance Operations : Continuous Finance Observability

Raghavendra Reddy
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Continuous Finance Observability
December 14, 2022

73% of the CEOs polled by Gartner in 2022 believe - Business Decisions are getting more complex. The reasons -

1. Rapidly changing business landscape - by the time business insights are put into action, it is generally too late.

2. The increasing complexity of business processes - a larger number of tools and systems producing a complex web of business data

How does the changing business paradigm affect the Finance team's Role?

Being natural business partners, Finance executives of the Future would have to adjust to the changing paradigm more quickly than any other functions. Business decisions in the Future need to be fast and data backed - creating a need for Decision Experts who are proactive in their business support function.

Why should Finance Operations be different in the Future?

1. Staggering Costs of Bad Decisions - With the increasing focus on Profitability and Cash-Flows at the organizational level, it's very important to look at all decisions from an ROI lens to make the most of the available resources. The decisions need to be holistic and fast with a lower decision-to-action time.

All operational decisions have a financial cost - and the cost of bad ones is generally catastrophic. Finance teams are getting involved in all business decisions, not just the strategic ones.

The rising costs of mistakes about the Future make one thing clear - the better your analysis of the environment, the better your decisions.

What it means for Finance Operations - Being able to connect data points across the organization for holistic business awareness.

2. The reducing importance of the "Rear-view mirror" - Today, leaders are increasingly more interested in the next three months than in the last three. In a world changing every week, precedence is becoming rarer and rarer. Gone are the days when Finance teams would consider Reporting as their main activity - the Future is all about, well, the Future - predictive analytics and scenario-based business cases. The ability to look ahead will differentiate the winners from the laggards.

What it means for the Finance team - Shift from ERPs as the data source (rear-view) to focus on futuristic Finance tools that proactively figure out insights and forecast the future aspects.

3. Productivity and Budget constraints - A tightening business environment reduce the investment across the organization - with a clear impact on all functions, including Finance. Budgets would constrain Finance operations in the Future and therefore need to focus on higher productivity levels with the right tech investments.

What it means for the Finance team - Getting more done with less through technology adoption. "67% of the 301 CFOs surveyed by Everest identified cost optimization and productivity improvement as a high-priority area for the next three years."

How Finance Observability is your Panacea to better Finance Operations

Right off the bat, let me clarify one thing - Finance Observability is different from reporting and monitoring in that - it focuses not just on what happened but what can happen in the Future and what needs to be done to win the game.

Here is how Finance Observability transforms Finance activities

1. Single source of truth- Finance teams spend more than 70% of their time collecting data from multiple sources, cleaning, and preparing datasets for analysis. Much of this work is currently done over emails or primitive spreadsheets, which are slow and prone to error. Crashing spreadsheets due to dataset size is also not an uncommon event.

How Finance Observability Helps - Finance Observability focuses on standardization of data definitions, workflow-based real-time data integrations, and data rules to collect and prepare data across systems reducing the time required for these activities to as low as 5%.

2. Analytics & Alerts - The next significant activity for all Finance teams are analyzing the data and figuring out business insights. The work is both "business as usual "and "ad-hoc" While excel macros can handle "business as usual" insights via simple arithmetic operations and so on, they fail when it comes to ad-hoc analysis & exception analysis. Additionally, scenarios requiring forward-looking analysis depend significantly on the analyst's skill, making models susceptible to errors.

How Finance Observability Helps - Finance Observability enables Finance teams to manage both ad- hoc and standard business requirements. Automates all the key insights and alerts at appropriate thresholds. Finance observability tools come with Predictive modeling capabilities, fusing macro and micro data to generate insights reliably.

3. Budgeting & Forecasting - Finance folks spend significant time (especially during those rough yearly and quarterly cycles) budgeting for the next period. These budgets can be created using simple techniques like "Base plus" or more complex "Driver-based models." These budgets go through multiple revisions and have complex interdependencies.

How Finance Observability Helps - Finance Observability creates a central platform for all business budgeting. Interrelationships between budgets can be automated, and iterations can be performed instantaneously. Easy-to-build driver-based models supported by audit trails ensure a fully collaborative and transparent budgeting effort.

4. Reporting - Monitoring KPIs and reporting business performance is one of the key activities and is currently managed via spreadsheets. For more evolved businesses, this could be a digital reporting environment. Adhoc reports requiring data from different sources are still handled manually in most organizations.

How Finance Observability Helps - While Finance Observability offers all the benefits of a digital reporting tool, it goes beyond and provides a custom-report-building capability and the ability to understand data at a transaction level. The "what" and " why" of data are taken care of by Finance Function.


Finance Observability provides a platform for a cohesive data strategy and automated tools for leveraging the operations data, thereby revolutionizing how Finance operates. Finance Leaders of the Future will be closer to the business and agile with their insights and accurate predictions.