In today’s data-driven world, CFOs and business leaders find themselves focusing on more and more things that would traditionally sit outside of their roles. From customer data to operational metrics, the sheer volume of data can be overwhelming.
For many, the challenge is not just about collecting the right data; it is making sense of it.
That is why we are seeing more and more financial professionals turn to analysis tools such as the Data Cube.
However, many are not even aware of exactly what a data cube is or how to get started with one.
That is why we have produced the following guide. We will give you a simple breakdown of the Data Cube, tell you exactly how it can help your business, and provide practical guidance on how your business can get started using one.
What Is a Data Cube and How Does It Transform Financial Data Analytics?
Everyone knows that in modern business, data is key, especially for CFOs. Whether you are forecasting revenue, analysing customer behaviour, or tracking operational performance, the ability to interpret data is crucial.
However, traditional methods of data analysis are starting to fall short.
This is where the Data Cube comes in.
Breaking Down the Data Cube
What Is a Data Cube?
Think of a Data Cube like a 3D spreadsheet that helps you see your business data from every angle.
Instead of having to analyse flat tables of data, you can explore numbers by multiple factors at once. As an example, someone could analyse how sales perform across different products, regions, and months all at the same time.
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Key Components of a Data Cube
To understand how a Data Cube works, you need to be able to break it down into its core components:
- Dimensions: These are the ways that you can analyse and slice your data, primarily used as labels. Typical examples are metrics such as time/date, location, products, or customer types.
- Measures: This usually is where you incorporate your main KPIs such as revenue, total purchases, sales, profit, etc.
A simple analogy is to think of the Data Cube like a Rubik’s Cube for your business. Twist one side, and you will suddenly be presented with entirely unique data. Unlike flat spreadsheets, it lets you see layers of all of your financial data at once.
What Your Business Could Do With a Data Cube
1. Make Multidimensional Data Analysis Simple
One of the most significant advantages of the Data Cube is its ability to streamline multidimensional data analysis. Instead of having to juggle multiple spreadsheets, you can now track the performance of all your KPIs in one space.
2. Take The Pain Out Of Forecasting
Financial forecasting can be challenging and comes with risks when dealing with complex datasets.
A Data Cube allows businesses to model different scenarios and analyse their potential impact.
3. Spot Trends In Performance Easily
If you are dealing with multiple datasheets, then spotting potential wins (or problems) can be tricky.
A Data Cube gives you space to track your overall data, similar to a dashboard, so you get a comprehensive view of performance.
4. Carry Out Audits With Ease
For businesses in regulated industries, compliance and audit readiness are top priorities.
A Data Cube consolidates all your critical data into one easily accessible repository. Key information can be quickly retrieved and analysed.
This not only streamlines the audit process but can also help businesses meet specific regulatory requirements tailored to their industries.
Real-World Uses of the Data Cube
Getting a Closer Look at Business Performance
Traditional spreadsheet reporting gives you the general idea but misses the finer details. The Data Cube acts like a magnifying glass for your data, helping you dive deeper into the numbers and gain insight through visualisation.
Analysing Revenue, Bookings, and Profitability by Product or Service
A Data Cube breaks down your key performance indicators in granular detail, such as by specific product or service. Businesses use them to identify which items are doing well and which might need some extra attention.
Understanding Customers: Retention, Growth, and New Customers
A Data Cube can give businesses a better understanding of how their customers are behaving. They can analyse retention, growth, and new acquisitions in different ways. For example, you might want to see how much value customers from different regions bring over time or spot trends in why some customers leave.
How Your Business Can Start Using the Data Cube
Choose the Right Software Tools For Your Needs
There are many options out there, including Power BI, Tableau, and QlikView, all of which offer the ability to analyse multidimensional data sets. When picking your tool, consider what your team actually needs. Is the software you are choosing user-friendly? Does it integrate easily into your existing systems, and will it grow with your business? Make sure that you pick a tool that ticks all the boxes.
Fitting the Data Cube into Your Workflow
As mentioned before, to make the most of your Data Cube, you will want to connect it to your current financial systems and data sources. This makes sure that it’s fed with accurate, real-time info, meaning that you can see the data that matters.
Tip: Clean data is fundamental to the success of the data cube. If the data sets that you are integrating need cleansing, as many of them do, carry out an audit beforehand and try to address any inconsistencies or duplicates before getting started. Remember, carrying out the initial prep work could save a potential headache down the line. Often, additional accounting support is needed to help businesses through this transition and implementation phase making sure that data is aligned across multiple periods.
Training Your Team
A Data Cube is only as effective as the people using it. Make sure to invest time in carrying out proper training.
This could be a number of shorter workshops showcasing specific use cases, the sharing of online tutorials or one-to-one coaching.
Conclusion
The Data Cube is a powerful tool for any business and CFO looking to make sense of multidimensional data sets.
The ability to organise and simplify analysis means you can optimise processes such as forecasting and performance tracking.
Tracking your business’s main KPIs within the Data Cube provides the insights you need to make smarter, data-driven decisions.
Remember, you do not have to do it alone; professional support can make all the difference. Book a chat with our team.