The evolution of the C-suite is perhaps best exemplified by the expanded role the CFO is playing in many organizations. No longer limited to financial stewardship, the CFO is now expected to be a strategic partner responsible for using data-driven insights to boost profitability and enhance efficiency.
In 2014, nearly 70 percent of CFOs reported that digital developments are changing their profession and how their companies do business. Today’s technology-driven world has produced a wealth of data that was previously in the realm of an organization’s CIO, but has increasingly moved into the domain of the CFO. Finance professionals are feeling pressure to connect the dots between multiple data streams in order to mine insights that will improve operational success. They are beginning to utilize and integrate analytics as a method of identifying patterns within new and existing data. As a result, more CFOs are now able to optimize their company’s growth pattern and align costs with strategy.
"In today’s industry, there is a greater need for secure technology. Therefore, IT and security teams should not only have to focus on software, but rather-secure software"
Understandably, CFOs who have not yet begun to utilize data analysis may be intimidated by the prospect. The sheer abundance of information collected by even a moderate-sized operation can leave finance professionals daunted by the prospect of where to begin.
CFOs can begin to adapt by taking a few proactive steps toward integrating data analytics programs into the organization’s day-to-day decision making. By unlocking the potential of big data, finance leaders will better support the company’s long-term strategy and vision, maintain financial prudence and ensure that the organization’s costs are aligned with operational success.
Set Objectives and Track Progress
As with most personal or professional goals, CFOs should begin by determining the organization’s short and long term objectives–and identifying key performance indicators to track progress towards these goals. This is also a good time to diagnose any operational or financial pain points within the organization that may need to be addressed.
By developing target metrics, a CFO is unconsciously committing the organization to routinely collecting and analyzing data. Consider this first step as the impetus to drive data analytics implementation to the forefront, motivating business leaders to apply data mining techniques and routinely assess the impact of key decisions on business objectives.
Engage with Others
It is crucial that CFOs and finance leaders engage with other members of the organization to guarantee data analytics become an established part of routine decision-making. A CFO may find that data analysis is already well-entrenched in other business units, which could create an opportunity to exchange information and collect firsthand feedback from those who routinely use data analysis platforms. This step will not only help finance leaders understand the capabilities and weakness of existing platforms, but also safeguard against any inconsistent analytics processes.
Propose Pilot Projects
As CFOs engage with others in the company, they will develop rapport and buy-in from key players within business units. In order to assure company-wide utilization of big data, CFOs should leverage this support to introduce pilot programs rooted in the insights distilled from data analytics. CFOs can start small by proposing new operations and should always be sure to welcome participation from other members of the organization. As these pilot programs are implemented and build momentum within the organization, they will illustrate the CFO’s data literacy, foresight and knowledge of on-the-ground perspectives to other business leaders.
Ensure Collaboration with IT and Data Experts
Data analytics platforms are intuitive, customizable and able to organize large amounts of information into digestible portions. Yet the human element is irreplaceable. CFOs should remember that the professionals within their IT and analytics departments are an invaluable resource when it comes to parsing the results generated and pinpointing important insights. Partnering with these individuals will help uncover additional points of view which may not have been previously considered. Collaboration with IT and data specialists could also lend additional credibility to the CFO when introducing new analytics-driven initiatives.
Confirm Data Accuracy
As finance teams rely more heavily on information and analytics platforms to influence decision-making, CFOs must remember to work diligently towards strong data governance. Strict and consistent guidelines must be implemented for data collection and analytics–and must be enforced across the organization. These principles should outline protocols for data ownership, quality, security and accuracy. Strategic insights can only be generated by reliable information and credible analytics.
It is important to proactively recruit feedback and constructive criticism from other members of the organization, including senior leadership. This is especially true when introducing new platforms or processes which disrupt the status quo. Seeking out and listening to the input of others will allow finance leaders to adjust course as needed in order to perfect the system in place.
Introducing data analytics is a significant but necessary undertaking which requires a thoughtful approach to ensure it is welcomed by the organization and leads to operational success. Finance leaders who aren’t yet utilizing data can begin by educating themselves on data analytics platforms and technology and examining existing data to gain greater insights on the business. The right approach can help CFOs elevate their role in the C-suite and ensure their organizations have the correct business models, platforms, talents and tools to succeed.