Data is everywhere, in everything we do. But many of us don’t capture this data, let alone analyse it. By doing so though, charities can identify efficiencies, save money and make more informed decisions. All of this will directly enable charities to better pursue their activities in line with their charitable purpose, ultimately benefiting their beneficiaries.
What is Data Analytics?
Data Analytics is not a technology, it is a concept. It refers to the use of certain technologies, skill sets and processes for the exploration, evaluation, and investigation of business operations.
Data analytics is the process by which insights are extracted from operational, finance and other forms of electronic data, internal or external to the organisation. The insights can be historical, real-time, predictive or risk focused.
Why use Data Analytics?
There are several key reasons for organisations to use Data Analytics.
- Provide invaluable insight
- Save money (eg cost recovery, reduce revenue leakage)
- Identify control issues
- Improve operational efficiency
- Look for fraudulent activity
- Test 100% of a data population
- Informed decision making
Over the last 20 years or so, there has been a huge upsurge in the volume of data being stored. As such, the use of Data Analytics is the only efficient way of gaining insight from this myriad of data. Charities can easily drill down in their data and gain insights to help drive their organisation.
Where can Data Analytics help charities?
Analytics can help charities provide better insight into the data they hold, which in turn helps with better decision making and taking action.
For example, data from the Finance, payroll and CRM systems can help in the following areas:
- Identify and quantify any control issues within key financial controls
- Identify potentially fraudulent activity in the core expenditure areas, such as Purchase to Pay and Payroll
- Provide better insight into fund-raising activities e.g. for charity retailers, analysing shop revenue and gross margin by period and region, and identifying any trends like poor performing shops
- Identify potential unclaimed and repairable Gift Aid income
- Cost recovery in identifying duplicate supplier payments
- Identify data quality issues across IT systems
These examples are easily repeatable through the use of scripts and workflows, to then be deployed as a continuous audit monitoring tool. Below is a screenshot of what this insight could look like in a reader-friendly dashboard, like the one that we use at BDO.
Your auditors can help with Data Analytics
All sounds and looks good, right - who wouldn’t want this valuable insight into their charity? But where do you start and what if you don’t have the right software or expertise? Simple - ask your auditors.
As internal auditors, we are often providing a fully outsourced Data Analytics service where the charity doesn’t have the software tools nor the expertise in-house. In these cases, we do the full end-to-end analytics journey for the charity, from obtaining the data through to analysis and data visualisation. The charity can then review and investigate the analysis without having had to invest in often expensive technology or in-house resource.
For those charities that do have the software but just don’t know how best to utilise it, or have an in-house internal audit team that need upskilling, a fully outsourced solution is not necessary. In these situations, we can help organisations embed Analytics as part of their own finance or Internal audit function. For example:
- providing hands-on training in the use of common analytics tools like Caseware IDEA and Microsoft BI
- build analytics routines with the organisation’s existing tools
- build bespoke Microsoft Power BI dashboards
The Future of Data Analytics
Data Analytics is continually evolving. As the volume of data available grows, it would be nonsensical to not take advantage of the valuable insight it can provide. We will see more predictive (future looking) and prescriptive (what to do) analytics take hold and the visualisation of this data continue to improve. Those who are adopting Data Analytics and have it embedded in their organisation as normal practice will be able to exploit this development sooner and use it to drive a better and more informed service for their beneficiaries.
Start taking advantage of Data Analytics in your charity now
If you want to start taking advantage of Data Analytics in your charity, but don’t know where to start – we can help. Contact us for an initial no-obligation conversation about how your charity can begin, or improve on existing Data Analytics practices. The data is there, you may as well use it.