As the final numbers for 2021 trickle in, CFOs will need to face the issues created by legacy data. The agility required of organizations the past two years increased the importance of having current, reliable data to assist decision-making. Unifying data for analysis avoids the costly and time-consuming requirement for data to be extracted from disparate databases and spreadsheets. Simultaneously, a single data source speeds up reporting and eliminates the inefficiencies and inaccuracies inherent in manual methods.
Frequently, organizations’ many divisions operate in silos – both architecturally and in terms of the data they gather. The Vena Industry Benchmark Report indicates that 57% of finance teams identify that disparate data represents a recurrent problem. This has a two-fold effect on a business’s capacity to exploit that data. Without considering data quality, potentially important data insights and actionable information get scattered and lost across the organization. According to Accenture, 76% of CFOs agree that combining fragmented data is critical to accomplishing company goals.
Another crucial aspect of the disparate data dilemma is the necessity for CFOs to ensure their company’s financial statements are accurate and auditable. This is a recurring problem for public corporations, or private corporations seeking financing and investment. An added benefit from a unified data reporting structure is that your company will simply audits, saving your finance team time, money, and more than a few headaches.
Widespread Cloud Adoption
Transitioning to a more agile and strategic reporting system planning requires a solid plan to record all data. The first thing you need to do is build a trustworthy cloud-based reporting solution that enables all essential stakeholders to access a single shared data source through a secure interface. As more data components migrate to the cloud, financial data and analytics teams will face the vexing problem of data governance and integration. That is why you must collaborate with your data and analytics professionals in establishing a comprehensive and unified strategy for data management when it migrates to the cloud.
As digital finance experts at Divvy explain, Cloud computing may also help reduce costs, but only when addressed with a financial-governance perspective. You’ll need to ensure that your finance department isn’t just thinking solely about cost, but is rather making an informed decision based on the value this new system will provide — don’t be penny wise but pound foolish. Finance is also well-positioned to monitor and alter pricing and KPIs as cloud providers enhance their performance and tool capabilities.
AI and data mining are rapidly being provided as “cloud-first” features and capabilities, and will ultimately become “cloud-only.” You will almost certainly need to reallocate people away from data management operations and into higher-value activities. For example, you may need to reassign team members responsible for your company’s data infrastructure management to cloud provisioning and have them work as data infrastructure specialists.
Once you’ve consolidated your data into a single platform, you can facilitate active planning by encouraging other departments to utilize the new system. The trick to ensuring the buy-in from other department heads is to ensure that they’re also receiving valuable insights from the new system, which will incentivize them to collaborate. Additionally, the centralized platform enables other departments to communicate vital non-financial data with the finance staff. As staff grow acclimated to the new platform, old “turf boundaries” between departments will start to become a thing of the past. From there, your department heads and unit managers can foster a culture of using data-driven insights to drive the decision making process across the entire organization.
Converging Data & Analytics Platforms
Tools for analytics, business intelligence, and data science are becoming more ambiguous in how they’re defined and how they function. This newfound overlap has the ability to strengthen and improve the connections between data and analytics investments, practices, processes, and critical business results. This will increase the sophistication of your business analytics, increasing organizational resilience and competitive advantage.
However, in order to capitalize on these opportunities, you’ll need to tackle your fragmented reporting infrastructure head on. While investing in data analytics is not a novel idea, most companies have spent their budget sporadically and without a strategic plan, resulting in incompatible tools and platforms. This has resulted in the isolation of analytics capabilities, making it more difficult to provide the level of analysis that will support that you need to make.
To align your analytics tools and governance, you must expand analytical capabilities, roles, and processes, anticipate changes in products and practices, plan ahead for platform convergence, and facilitate collaboration between departments throughout your organization.
Data Management Augmentation
Like all finance executives, you desire data that is timely, comprehensive, and consistently represents the spectrum of perspectives held by various stakeholders. Additionally, you want to feel confident that the data accurately represents company performance, and does so without requiring significant time to organize and report on the metrics that matter.
According to Gartner, 54% of finance organizations continue to struggle to satisfy these demands, delivering reports that don’t serve the needs of decision makers within the leadership team. Augmented data management, which leverages machine learning and artificial intelligence approaches, may assist.
Automating data management is crucial, as the variety and abundance of data begins to exceed the ability of human staff to meaningfully interpret it — at least at the pace and scale necessary for digital commerce. This need for enhanced data management will only grow as enterprises migrate more data assets to the cloud and data and analytics teams battle with data trust challenges and a skills shortage.
Overall, CFO’s responsibilities have evolved significantly over the previous few decades. While the finance’s historical responsibilities included bookkeeping and financial reporting, today’s CFOs must be ready to apply real-time financial insights to operational and strategic decision-making. You can’t afford to wait for trends to develop before reacting to them — you’ll need to anticipate what’s just around the corner.