The Intricacies of Financial Analytics in the Event Industry
Financial Analytics – An Outlook
In today’s world of competitive businesses, analytics is an essential part of staying competitive especially in this digital era where data is omnipresent. Financial analytics is helping businesses in understanding current and past performance; predict future performance thereby arriving at making smarter decisions. Financial analytic is arming Chief Financial Officers or CFOs with the required tools to make sense of an increasingly complex and competitive business world.
Financial Analytics combines the internal financial information and operational data with external information such as social media, demographics and big data thereby addressing critical business questions with unprecedented speed, ease and accuracy. Financial analytics is becoming an important and inherent part of software applications that are being used by event industry.
The emergence of new business models, the changing needs of the traditional financial departments of event industry and advancements in technology have all led to the need for financial analytics. The financial analytics when used as an add on with event management software is providing more reliable and timely financial reports that is emerging as the main factors the success of an event management firm or company from the perspective of its bankers, analysts, and investors. Financial Analytics solutions are benefiting organizations across sectors through a combination of cost savings, organizational alignment and the ennoblement of high value business risk analysis that was not previously attainable by the finance functions of an organization.
Modern financial analytics models enables opportunities for business collaborations through focus on metrics in addition to the improving the agility of the concerned organization in responding to emerging opportunities for revenue enhancement and cost reduction. In all, financial analytics encompasses finance, controller-ship, accounting, investor relations and business partner roles.
Financial Analytics in Event Management Industry – A summary
Several technology companies are stepping up to address the explosion of data collections sources with an objective of improving their ROI by conducting successful events. Financial analytics in the event management industry helps in the creation of ad hoc analysis to answer specific business questions and forecast possible future financial scenarios.
The financial analytics of any industry can be prepared or through its income statement, balance sheet, Actual to Budget Bridge, Actual to PY Bridge and other categorizations. The financial analytics helps in establishing legitimacy and in promoting the sustainability of the concerned event management company.
It can be challenging to make realistic financial projections for a company in the event industry, especially when the event is new. In addition to taking care of revenue, there is a challenge of tackling Return on Investment of participating sponsors.
About 83% of companies that take part in an event take part in an event because they want to increase their sales. All the sources that the event management companies use to sponsor an event make up event revenue. The following channels are the possible sources that an event management firm can utilize for its financial analytics strategy-
- Participation Fee
- Merchandising sales
- Government grants
To understand the impact of an event on the bottom line of the company – the concerned event management company should first understand the data that spans all the stages of its event. In addition, it needs to have powerful analytics technology for its event revenue measurement. It should check out the fundamental ways of revenue tracking/ revenue allocation that can benefit from.
Throughout the organization of an event, client data is transmitted across different platforms that include email, registration forms, mobile apps, on-site check in system and others and as such to track all of that data and derive maximum insights – an integrated financial analytics tool comes in handy.
Making financial analytics seems to be daunting but to accurately estimate revenue even for the most events, using an integrated event management platform that keeps all the data in one-place helps in the end.