The explosive growth of business data has impacted organizations of all sizes and across all functions. But a big and as-yet-untapped opportunity to harness the power of this data may sit with the office of the CFO.
Recognizing the benefit that access to data can bring, CFOs must now address a host of new, related challenges. These encompass the selection and rollout of collaboration tools and processes, new technology, training, and staffing.
Big data doesn’t distill itself into actionable information. But the ability to take a deep dive into the data that matters most, at the time when it’s most critical, can be invaluable. And this is becoming increasingly vital in the rapidly changing marketplace and dynamic regulatory environments.
Ultimately, CFOs need to embrace the role of “chief data officer” and elevate their focus from tracking, reporting, and static planning to continual gathering and prioritizing, ongoing management, and active planning.
This shift in data ownership is putting CFOs at the heart of data integration. Finance leaders today face rising demand for the intelligent combining of both financial and non-financial data. Increasingly, finance executives require access to — and the power to — utilize all categories of data to get a clear and holistic view of the health of the business, identify areas for improvement and change, and develop the best game-plan based on current conditions.
At the same time, companies of all sizes are increasing the frequency with which they access data. In large part that’s due to the cloud, which creates an expectation for accurate, up-to-the minute, consistent data across divisions, business units, and geographic locations around the globe.
Every day, more CFOs are responsible for incorporating non-financial KPIs into their metrics, to realistically assess the entire business and provide strategic guidance on achieving and sustaining performance. A recent survey found that 76% of CFOs say they are currently tracking non-financial KPIs.
But gathering and assembling operational data — from customer satisfaction to sales pipeline to supply chain performance — is often a manual and cumbersome process, as the data resides in siloed data warehouses.
The data is compartmentalized, but organizations look to the office of the CFO to initiate integration of various systems in order to operate from a single version of truth.
With both process and technology updates, many areas of the business have been automated that weren’t previously, such as customer relationship management (CRM) and marketing automation software. These systems hold rich data that can impact performance and must be aggregated with financial metrics in order to accurately identify key areas for growth, opportunity, and change.
But until that data is integrated, its true value can’t be realized. And, the resulting value that finance teams can deliver to the company in terms of accurate forecasting, reporting, and business-critical decision making in light of sometimes volatile market conditions, becomes a true competitive advantage.
To accommodate these increased demands, CFOs must consider the following three areas:
- Process. Integration of data requires teams to develop a new process in how data is gathered, aggregated, shared, reported, and analyzed. Breaking down silos — both from a personnel and system perspective — will be required for organizations looking to embrace an integrated data model.
- Technology. The need to incorporate data from disparate systems requires CFOs to gain a better understanding of how to combine critical financial data from their ERP systems with other financial and non-financial systems. New technologies are available that can help CFOs and their teams integrate this data and get a holistic view of the business, but CFOs will need to champion the effort in their organizations.
- Talent. The increased collaboration required to successfully work with non-financial data puts new demands on the finance team. The need for “soft skills” to integrate with other functions and business units, as well as a macro view of the business, is changing what it takes to be a leading CFO of the future.
In short, the pace of data accumulation has already surpassed our wildest expectations. Now it is up to organizations to determine how to make efficient and strategic use of the data while it is still fresh and relevant. And successful CFOs will be at the heart of the integration required to realize ongoing, real-time analysis and smarter decision-making.
With the right process, technology and talent in place, the CFO’s role becomes truly transformational for any organization in a fast-paced, competitive industry.
Tom Bogan is the CEO of Adaptive Insights, a developer of cloud software designed to let companies collaboratively plan and model, access real-time analytics, streamline financial reporting, and accelerate financial consolidation.