Every day, businesses produce and process a massive amount of data. Over the years, technologies, such as artificial intelligence (AI) and machine learning, have emerged to help business leaders wrangle this data and extract actionable insights from it.
The improved visibility that these analytics provide is especially helpful for chief financial officers (CFOs) in competitive markets. Leveraging these analytics, a data driven CFO can ensure smarter spending decisions, more accurate budgets, and a steadier cash flow.
But how do you get there? The key is to invest in the right technology. Today, we’re sharing how CFOs can leverage new data solutions to succeed in today’s competitive market.
5 Tips for Becoming a More Data Driven CFO
1. Embrace Data Storytelling
Traditionally, businesses have used data analytics to create dashboards and reports. They’d pull up these visuals at team meetings and discuss how current and past trends could impact future operations.
While there’s still a time and place for this type of reporting, data-focused CFOs are concerned less with predefined dashboards. Instead, they’re more interested in the story that’s being told through that data.
Tools such as AI and native language generation can automatically analyze data and deliver insights and takeaways in a narrative format. In the future, we can expect these storytelling reports to eclipse standardized dashboards.
Fortunately, this won’t mean more work for your data team. Rather, augmented analytics will be the force behind the process, automatically generating a large portion of those stories.
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2. Invest in Better Tools
Your company could be missing out on valuable data simply because it doesn’t have the right tools in place to capture it. If your information is spread across multiple networks and systems, this process becomes even more complicated.
Before you invest in analytical software, like ERP or SCM software, it’s important to make sure it’s the right fit for your company.
You should also ensure strong data management. If your data is unclean, incorrect, or inaccessible, your finance team could spend hours, days, or weeks sifting through the information trying to merge and format it the right way.
Take the time to analyze your data needs and decide which systems can best support them. Then, make the case to the rest of your C-suite and explain the benefits that those tools could provide.
For example, in the manufacturing industry, organizations can realize a multitude of benefits from manufacturing ERP software, from improved supplier elations to easier product customization.
3. Prioritize Augmented Data Catalogs
An augmented data catalog is one that uses machine learning to automate repetitive and routine data management tasks, such as:
- Metadata discovery
- Data cataloging and categorization
- Data curation
- Data application and enrichment
Without this tool, finance analysts are required to complete these tasks manually. This can take their time and attention away from more high-value data analytics tasks, as well as training and team collaboration.
By investing in augmented solutions, you can automate the data management process and further your understanding of the insights you receive.
4. Align Financial Plans With Corporate Objectives
Finance, planning, and analysis (FP&A) shouldn’t operate in a silo. To be effective and benefit the entire enterprise, CFOs must work alongside other corporate leaders to drive real operational change.
Yet, it’s common to get so bogged down by day-to-day management reporting that you can’t take the time to strategize a long-term, big-picture plan.
When you use data analytics technologies to offset some of this work, it frees up time for you to meet with other C-suite leaders. Use this time together to identify FP&A initiatives and explore how they can drive real business value throughout your organization. Then, determine the resources you need to see them through.
When you’re no longer bound to aggregated spreadsheets and inflexible tools, you can create a unified approach to FP&A that aligns both corporate and financial planning.
To implement these plans, finance teams must have real-time access to business data so they can make quick decisions and shift spending as necessary. One tool that can provide this access is an ERP system. These solutions allow everyone to view the same information from anywhere, at any time. As a result, FP&A leaders can adjust their strategy according to changing business conditions. Plus, they can do it all without constantly pulling the IT department into the loop.
5. Consider Cloud Deployment
When financial data is stored and managed in-house, team members have limited access to the information they need. They’re required to be in the office and in front of the computer. This isn’t always realistic, especially in a post-pandemic economy that prioritizes flexible work environments.
As such, many CFOs are turning to cloud technologies to decentralize their data and analytics capabilities. By migrating enterprise data into the cloud, you can free up internal space and enable a more agile, responsive workforce.
Another benefit of cloud-based data deployment is it allows finance leaders to distribute accurate information to business leaders without sacrificing control over the way its managed. Historically, these updates have been submitted in shared spreadsheets or emails, and data becomes obsolete almost as soon as it’s sent.
With cloud solutions, FP&A leaders can establish and oversee different levels of data control and management. This improves communication, reduces risk, and ensures everyone is working from the same dataset. There is one single version of truth rather than umpteen spreadsheets floating around.
Researchers predict that cloud services will drive 90% of global data and analytics innovation in 2022. Early-adopting CFOs can be more competitive if they leverage this technology sooner rather than later.
A New Role for CFOs
For years, CFOs have served as gatekeepers of their department’s data. Now, they’re shifting into more of a facilitator role.
With the right tools, you can assemble, store, manage, and share data across the entire enterprise. This puts the finance department front and center and gives it an integral role in every key business decision.
By becoming a data driven CFO, you can integrate financial objectives with greater corporate strategies, ensuring that every move your company makes is one that will ultimately benefit its bottom line.