The 2017 CFO IT study is out and it shines a bright future for data analytics. CFOs are setting the data agenda and the survey reveals more than 70 percent of CFOs and finance executives plan to devote substantial time to data analytics in the next two years.
While it’s great news that CFOs are focused on investing in their data analytics capability, what we are witnessing is that companies are now drowning in data. The data fragmentation issue is only getting bigger and it’s creating more complications for businesses to manage.
The Office of Finance is clearly driving analytics across many organizations and this aligns with the Gartner-FEI Study. It cites that the single biggest issue and investment priority for CFOs is business analytics and quality of data with BI, analytics and performance management being the top areas of CFOs’ focus for IT investment.
All this rich data can be a powerful source of answers to serious questions for managing and operating the business. But it’s not easy to get there due to the fragmentation of data resulting from the replacement of ERP systems by a multitude of best-of-breed functional applications, the lack of data standards or enforcement of those standards where they exist, unknown data quality, lineage and auditability.
Your data also needs to meet evolving business requirements not just for reporting and analytics, but also with activities such as M&A. At the recent WSJ CIO Network Conference, a Barclays banker pointed out that most firms are gathering piles of data, but they are not leveraging it in a way to gain actionable business intelligence.
Financial information is now spread across many systems, and the Office of Finance is increasingly reliant on multiple cloud systems without an easy way to deliver insights across these sources. They have to deal with interoperability between financial and operating data. They have to create structure, organization, and delivery of information in an agile, digestible format. And they must be able to roll up multiple ERP systems into a consolidated view.
To truly get useful business insights from your data, here’s my take on three measures the Office of Finance should adopt:
- Take stock of your data – Identify the data you need and how you access it in a timely and non-manual manner. Consider all sources including internal and external cloud, legacy applications, plus big data applications.
- Take steps to ensure that extracted data is trustworthy (of known high quality and consistency) – We cannot risk simply throwing together data from different sources and hope it’s good enough. Inevitably, it will include non-standard, incomplete data, plus outdated and duplicated data. This requires data harmonization (the process of combining multiple data sources into an integrated, unambiguous entity “golden copy” record), data quality and governance. These are established disciplines that are a must to ensure your data is trustworthy.
- Streamline reporting by pre-assembling insightful reports that enable the finance function to self-serve for reporting needs without reliance on IT – This is a win-win for your finance and IT departments as your finance teams are empowered with the right reporting tools to make faster decisions … and it frees up your IT department to focus on more strategic and business transformational initiatives.
What’s your approach to driving more value from your data to better inform the business? It’s our core focus and I’d appreciate your thoughts.