Data Storytelling is a discipline at the intersection of data analytics, psychology, and design. It allows you to convey data insights in the form of a compelling visual story. In FP&A specifically, it is the art of using financial and other data to tell a story that resonates with stakeholders. It helps in presenting the company's financial performance in the form of a story that gets the point across in a memorable way and helps influence the desired action. It integrates the power of storytelling and reporting. A story is more than a spreadsheet or a presentation and as FP&A professionals we must present a story in a compelling way that influences the desired action.
FP&A Data Storytelling Basics
You need to use stories to help your audience understand financial insights, connect with them emotionally and make data-driven decisions. Data visualization can be used to tell any story in an effective way by organizing data in a visually appealing and easily understood manner.
The below image shows 2 charts. The chart on the right is telling the same business story as the one on the left. However, the chart on the right is much more effective as it gives a clear narrative and a recommendation. There is always a story in our financial data and it’s the job of FP&A professionals to find it.
Numbers, tables, and financial statements are not on that list, as we are not naturally good with those. To communicate these types of information in an understandable and memorable way, we need to use what we have at our disposal. FP&A professionals need to be proficient in the best methods in using stories, shapes and colors to help all kinds of audiences understand financial information, connect to it and use it to make data-driven decisions.
Many of those who have realized the significance of Data Storytelling, are still overwhelmed by its perceived complexity. It can seem to be a completely new craft, and often needs to be learned from scratch. It is certainly true that we were not taught data storytelling at college or university, but it is hardly something entirely new to us. Everyone has some innate capacity for storytelling!
That is exactly the main reason we turn to storytelling as a form of communicating complex data insights , because it is natural and understandable for all of us.
Keys to Maximizing Data Storytelling in FP&A
In order to effectively utilize storytelling in the FP&A process, it’s important to adhere to the following keys to success in gathering information and developing your most important messages:
1. Use the best tools:
Providing your team with the right reporting and data visualization resources enables them with a strong head start in the process of transitioning data into powerful insights. Utilizing software that automates manual tasks, and provides real time updates in one centralized location is a game changer in any task in the finance function, especially if you are pressed for time. When you put data visualization and reporting tools into your employees’ hands, you are freeing them up to apply their skills and experience to greater effect.
2. Eliminate data silos and view the big picture:
Most companies are operating with multiple business applications, each with its own dedicated reporting mechanism. While this can be a convenient way to meet basic requirements, it usually falls apart whenever you and your team may require a more specific and refined analysis. Sales forecasts, for example, typically require an analysis that involves historical sales order information from your ERP system alongside sales pipeline data from the CRM. Doing that kind of analysis can be cumbersome and error-prone because you must copy and paste data from multiple source systems into a spreadsheet, in which you must further manipulate the data sets prior to executing any analysis. In addition, many organizations run into the obstacle of having “multiple versions of the truth.” This creates debates about which number is correct, wasting time and frustrating executives across the board. Purpose-built reporting tools make life vastly easier by providing a single lens through which to see all of your organization’s information.
3. Have Great Visuals
Quality visuals must accompany great stories. While infographics are a relatively new phenomenon, the concept of using visuals to convey a point is an old one. A picture is worth a thousand words. Charts and graphs can illustrate trends and projections in a manner that anyone can quickly and simply process. However, images do not always need to convey quantitative information. Organizations like CURE International show their donors pictures that vividly bring their mission to life by sharing individual success stories and giving them a human face.
4. Holistically Refine Your Approach to Data Storytelling:
Finding the right story might require a significant amount of trial and error. Communicating with your colleagues one-on-one and testing out different strategies is critical. You’ll want to figure out what resonates the most with your target audience. Don’t be afraid to make data storytelling part of your overall communication strategy for the FP&A process. You should take the time to test things out step by step and draw a logical conclusion about what strategy works best for you.
(Below: Example of Data Storytelling for foreign customers)
In sum, data storytelling is an indispensable component of bridging the gap between the detailed information that is difficult and time-consuming for most people to comprehend, and the powerful insights that create the foundation of all good business decisions. Along the way, it’s critically important to have great tools in place to support you and your team in that process.
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