Well-informed leadership can make all the difference in the increasingly competitive markets of the modern era, and more organizations are beginning to leverage reporting analytics to achieve the highest possible levels of performance. When firms have all of the information they need to make the right choices about a wealth of strategic, financial and operational responsibilities in real-time, they will enjoy enhanced flexibility and speed with respect to new deployments and initiatives.
Now, while these types of solutions have been primarily used for accounting, compliance and certain strategic matters such as marketing and customer relationship management, leaders appear to be recognizing the much expansive breadth of potential opportunities contained within the technologies. Remember, reporting analytics solutions can reduce the amount of error and inefficiency that sprouts up with traditional data entry protocols.
The ability to eliminate data entry can come with significant advantages, some of which are direct such as greater responsiveness to compliance and others are a bit more indirect such as enhanced employee engagement. For the latter, studies have found that data entry responsibilities bog down many staff members, especially those in the human resources and accounting departments, and freeing these employees up from menial tasks enhances their job satisfaction.
With all of this in mind, it should not be all that surprising that reporting analytics solutions are being used for a more diverse range of functions and objectives today than in the past, as companies work to get the most out of the technology. Certain industries have become especially aggressive in their deployments of these tools for risk management procedures, as they are a good fit for firms that have complex needs in these areas.
Risk management 2.0
International Data Corporation recently released a report regarding a confluence of factors that are leading many corporate risk managers – especially those that are tasked with handling credit risks – to leverage more advanced solutions for their core responsibilities. The analysts pointed to the financial services industry as one of the leading sectors in this regard, with the economic downturn that took place during the Great Recession being a major catalyst for increased adoption and utilization.
Credit risk has been among the trickiest matters during the recovery, as the economy has certainly rebounded but not without a wealth of hiccups and variations that have surfaced as the nation regains its footing. According to IDC, financial institutions and firms that are in some way related to this industry are projected to spend roughly $6.57 billion on reporting analytics solutions and other software to assist them in credit risk management procedures.
As a note, this takes up 17.9 percent of all the investments in risk management and services on a global scale, while the expenditures are only going to rise in the coming years, with the analysts forecasting a 9 percent compound annual growth rate between now and 2018.
"Credit risk is the largest, most elementary risk faced by financial institutions. Leading financial institutions have made measurable headway in laying the foundation for a robust credit risk management system following lessons learned from the global financial crisis," IDC Financial Insights Worldwide Risk Management Strategies team members Li-May Chew and Michael Versace explained. "Astute organizations positioning credit analytics as one of their core competitive differentiators will benefit from our insight around innovations and investments that these nine enterprising risk solution providers are undertaking to enhance their credit risk management offerings."
Finally, the researchers listed smoother customer acquisition, seamless analysis of credit and markets, modernization of IT infrastructure and responsiveness to new fluctuations as some of the common strengths leading reporting analytics solution vendors are currently providing.
While this is a very specific use of reporting analytics that some organizations might not need, it should serve as some indication of how powerful and amiable these solutions are in their current iterations. Think of it this way – credit risk management among major financial institutions is an ever-changing, erratic and time-sensitive matter, and if reporting analytics can be used to improve performance in this regard, the potential uses are boundless in other areas.
For example, manufacturers can use these tools to better handle reporting and accounting in the supply chain, making responsiveness to new demands and requirements easier to oblige as the market shifts. In health care, organizations are leveraging reporting analytics tools to become far more efficient and accurate in compliance-related tasks, while marketers are using the technology to boost the speed and effectiveness of their initiatives and pursuits.
As such, one would be hard-pressed to find an organization that would not benefit from advanced reporting analytics tools in its workplace. Within the coming years, these solutions will become less optional and more imperative with respect to attaining and sustaining a competitive edge in increasingly saturated markets.