I read an interesting article on CFO.com recently regarding “big data”, a term that we are hearing more and more about. So what is “big data” and why is it important?
Big data is the sum of information your organization captures for who it serves and the services it delivers. So it is information a non-profit captures around your programs and who you serve. The information that is captured can then be used to understand how best to deliver your programs, where to deliver them, what is working or not working, and how these metrics inform the decisions your organization makes that define your success in meeting your mission.
Finance is hugely important in this process and finance departments need to recognize this fact and get proactive sooner rather than later. Financial planning and analysis (also known as FP & A) around big data is key to your organization being able to be successful long-term and avoiding serious pitfalls along the way.
For example, if I look at my company, JMT, it is not enough to have excellent products and services. At first glance, these products and services may seem to meet JMT’s mission, but I have to recognize that if our product and service offerings are not delivered in a financially sound manner, JMT will have to close its doors. We may have met our mission, but not on the financial basis that is needed to pay the bills.
The same thing applies to non-profits. Your “big data” is important as you need to understand who you serve and how, where, why you serve them. What are the outcomes you are getting for your efforts? What is the short term and long term impact? You need to tie those efforts and outcomes to the financial dollars to ensure those efforts make sound financial sense.
Financial planning and analysis is key to your organization’s success and “big data” is becoming more and more important in that planning. Whatever you are currently using to track your data, you will need to make sure that you are looking at the data and for your organization as a whole, in a format that is easily visible and can be acted on in a timely manner.
Interested in learning more?
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