Why CFOs must drive data analytics companywide
Chief Financial Officers (CFOs) are taking on more responsibility as their job and that of the finance function expands and evolves. Traditionally, business transformation has been about cost cutting, a process the finance team is all too familiar with, but now ‘change’ has a much broader scope as it relates to advanced analytics and digital transformation. It’s about how to use rich data sets to align finance and strategy across the whole business, improve budgeting and help everyone retain customers. CFOs and the finance team need to be well-equipped to take on the data analytics challenge within your business.
CFOs can integrate all the operational and financial data needed
The financial services team has always turned to historical data to answer its questions, so it makes sense, with the proliferation of analytics tools, that finance leaders take charge of combining disparate data sets and helping everyone in the business to understand and use new insights to improve performance. What distinguishes the most successful CFO is whether they choose to be a data champion for the entire business rather than just the finance team. CFOs who see the value in creating analytics capabilities across the whole business are using modern business intelligence platforms to combine and review financial and operational information from ERPs and many different data sources.
All businesses are generating a wealth of data, creating both opportunities and challenges for those in charge of collating and analyzing data. A CFO needs to play a central role in making a smooth transition from excel spreadsheets to a business intelligence platform by developing the business strategies to capture important data from various channels so the business can be aware of changes to cashflow, declining customers and reaching revenue targets.
You will need to consider what data silos you want to integrate with – finance and traditional ERP (enterprise resource planning) systems, pricing system, operations, and supply-chain-management system. But once these important decisions are made around what to include and the business rules (data analytics suppliers will help you work with stakeholders around these initiatives), the automation of the data flow can be set and will refresh the data daily ensuring the information is secure and maintained.
The focus needs to be creating a complete database that is robust and agile that ensures you draw out the insights you need. A CFO can now leverage this data for strategic insights across the business including sales and marketing, inventory, and purchasing and pricing to enhance business performance.
Embracing a truly integrated approach to a data analytics strategy is a significant undertaking that requires time, full support, and commitment. However, CFOs that actively take steps toward being data-driven with a robust business intelligence platform can increase their effectiveness and create meaningful change in their organizations.
Making the financial and non-financial results visible
The ability to access a centralized view of multiple data sources may seem complicated but can be achieved via a dashboard. A dashboard is an efficient solution for viewing the business indicators relevant to a department or product in real-time and is a clear way of sharing cross functional metrics.
Sales reps can quickly view their sales figures and targets, as well as customer information. Managers can see at a glance how their department is performing against forecasts or drill down into the underlying data that sits behind the dashboard. This gives everyone the chance to learn more about your company’s financials and the bottom line.
A big opportunity for the finance function is how they help everyone gain a basic understanding of financial reporting to empower and make them more aware of overall performance. What this does is help the whole organization improve their financial skills and positively impact decision-making.
If you take an example of someone in customer service who wants to make a purchasing request for something that they want to do at a branch, before they even flag it with management, they should use their knowledge of finance to evaluate whether this is an investment worth pursuing and delivers value. The merging of all functions with data driven-insights and a basic background in finance can improve the quality of decisions everyone makes in the organization.
CFOs that can offer easy-to-use analytics tools to employees in any area of the business, whether at the executive level or business unit level, give their companies a distinct competitive advantage. Employees are confronted with dozens of questions every day and data-driven insights provide the information they need to make the best decisions. As more companies adapt to a data-driven culture, they come to recognize that the guidance of a CFO is vital to their continued success.
To learn about getting more value from your business data, download the Modern financial planning and analysis ebook.
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