Cloud For Finance

Tracking the Intangibles: Five Non-Financial KPIs That Agile Finance Leaders Measure


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Agile Finance Revealed: The New Operating Model for Modern Finance

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Your finance team is undoubtedly comfortable working in a world of concrete metrics — from revenue and expenses to cash burn and profitability. But in an increasingly competitive landscape, modern finance teams are also tracking intangible key performance indicators (KPIs).

A recent study of agile finance leaders by the American Institute of CPAs (AICPA) and Oracle revealed that they're more likely to track nonfinancial KPIs, including talent analytics, competitive intelligence and brand reputation. The report, Agile Finance Revealed: The New Operating Model for Modern Finance, surveyed nearly 500 senior finance professionals at organizations with more than $200 million in revenue.

Agile finance leaders described a high-performing group of respondents focused on business transformation. The report contends that modern finance teams who include these nonfinancial KPIs in their own metrics can produce better, more forward-looking insights for their organization.

Cloud-based technology solutions can help finance leaders monitor, consolidate and share these various intangibles across the organization. "The data generated tends to belong to the owner of the process," according to the AICPA/Oracle report. "Finance has a potential role as a broker of information who ensures that salient information is validated and made available to decision makers.

Intangible KPIs

Intangible KPIs

KPIs that drive business value

Your organization should identify the indicators that best represent your business model and goals, which will be different depending on your organization and industry. That said, agile finance leaders in the study overwhelmingly tracked nonfinancial metrics within five broad areas they consider to be top drivers of business.

Here are some of the intangible KPIs they monitor — and why you should, too:

  • Talent pool: More than 80 percent of agile finance leaders measured their organization's talent pool, compared to about 60 percent of other finance leaders, according to the AICPA/Oracle report. This is for good reason. "Agile finance leaders have identified the lack of talent or skills as the biggest obstacle to finance transformation," the report states. As such, it's wise to partner with your company's human resources leaders to identify talent needs and metrics that predict what's in your organization's pipeline.
  • Customer experience: The interactions that customers have with your organization determine if and how often they come back, as well as whether they refer others. That's why more than 80 percent of agile finance leaders include customer experience KPIs in their own suite of metrics, which often encompasses overall customer satisfaction, Net Promoter Score and industry benchmarking. From a finance perspective, customer experience metrics provide a context for financial KPIs and can reveal what your organization is doing right — and where it can improve.
  • Business process efficiency: In the quest to become more agile, many organizations have focused on optimizing their business processes. For instance, modern finance teams are tapping into robotic process automation or machine learning to streamline accounting services. Including measures of finance and broader organizational process efficiency can help finance teams monitor the ROI on automation efforts, and make better decisions about where to invest next.
  • Brand reputation: It's challenging to put a financial number on a brand's reputation. Yet, this intangible asset is a key driver of company performance and value, and one that agile finance leaders keep top of mind. There are several ways to monitor your brand's reputation, including tracking online customer reviews, employee retention and customer churn. Cloud-based tools can help finance leaders capture and analyze much of this data, offering deeper insight into challenges and opportunities.
  • Competitive intelligence: More than half of agile finance leaders say they also monitor KPIs regarding their competitors. While this has long been the case for financial KPIs available via public financial filings and market reports, modern finance leaders also examine their competitors' nonfinancial KPIs. This might involve monitoring your competitors' online reputation, comparative advertising, content marketing or talent recruitment efforts.

Putting it together

Financial KPIs are no longer enough to provide finance teams with a full picture of their performance. Fortunately, cloud-based solutions make it easy to gather this information and create a single source of KPI data that finance – and the rest of the organization – can trust.

By incorporating intangible, nonfinancial KPIs into your analysis and forecasting, you'll gain deeper insight into your business, its challenges and its real potential.

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