As the world becomes increasingly aware of the importance of data analysis in decision-making, CFOs today are expected to gain data insights to support the company’s long-term vision. Here we take a look at how a data-driven CFO can successfully implement data analytics within the organisation.
CFOs today are expected to use data to gain insights to support the company’s long-term vision. Here’s how a data-driven CFO can successfully implement data analytics within the organisation.
The starting point towards becoming a data-driven CFO is one that requires meticulous planning and a step-by-step approach to successfully implement it within the organisation like the one outlined here.
The world is undergoing an unprecedented digital transformation like never before. One cannot undermine the importance of utilising data to keep up with this ever-evolving space; more so from a business perspective. Entire industries and organisations are becoming increasingly aware of the importance of data analysis in decision-making, but connecting the dots between multiple data points is no mean feat. As a CFO who is entrusted with charting the course of the company’s journey, it puts tremendous pressure to identify means to optimise a business’s growth and align its costs with this strategy using data sets. They are expected to champion digital transformation and use big data to gain insights that can improve profitability and operational efficiency to support the company’s long-term vision.
Understandably, extracting and analysing a multitude of data can be rather intimidating for even someone who has a sound background in data analysis or prior experience leading finance teams to success. There is no magic solution which when implemented can make one’s decisions and strategy data-driven overnight. However, as someone with a finance background, the finance leadership will be data-oriented by nature to begin with and is already armed with visibility into the inner workings of the business — be it efficiency, sales, marketing or operations— as well as the strategic aspect of the business. The starting point towards becoming a data-driven CFO is one that requires meticulous planning, as is the case with any large-scale business revolution, and a step-by-step approach to successfully implement it within the organisation.
Identify the company’s short-term and long-term goals
As a CFO, one of the first things towards becoming data driven is identifying the company’s goals; both short-term and long-term. Once identified, these goals can be used to narrow down on performance indicators to help track their progress. In a business’s day-to-day operations, data analytics can help business leaders define these performance indicators and assess their impact on company goals. In the long run, as this exercise becomes a practice, this will commit the organisation to routinely collecting and analysing data.
Get the entire organisation involved
Once the organisation’s goals are ascertained, the CFO needs to get the entire company on board for maximum efficiency so as to make data analytics a part of day-to-day operations and decision making. This can especially be useful if another team or department within the organisation is already using analytics. They can be an invaluable resource to help bring the rest of the teams up to speed by saving hours of groundwork and accelerating the switch to data analytics.
It is vital to utilise the company’s own tech team or data department as they may be able to make better sense of the data collected. Not only can partnering with these teams help in the decision-making process and add credibility, but it can also introduce a different perspective or point of view which may not have been previously considered.
Ensure Accuracy of Data
Getting the entire business on board will not only help finance heads and CFOs make better choices when it comes to choosing the right data analytics platform, but it can also ensure that inaccurate analytics methods are not employed within the company. A strong data governance is the key to good insights and strategies. A CFO must ensure the implementation of strict guidelines for analytics that are adhered to by all members of the company. These guidelines should outline protocols for data ownership, quality, security and accuracy. This is imperative as a strong governance foundation can alone ensure reliable and credible data analysis.
Getting data analytics integrated into a business’s functioning requires a significant amount of time, learning, and dedication. Seek feedback from other member of the company to decide if something needs adjusting, as is common with all new ventures. There may be aspects that weren’t considered before or they may be able to add a different perspective to an issue faced given the different experience they bring to the table. It will also be a valuable team-building process for the other members since they too can have the opportunity to contribute to the strategy building efforts of the business and goes to show that their views are valuable to the organisation.
The finance leaders of today are an integral part of the C-suite and an important strategy partner. The key for CFOs here is to start small by educating themselves on the various platforms and technology available for data analytics and then examining the data to gain insights about the business. By becoming data-enabled, the finance leadership can elevate their role within the company, increase their efficiency and expedite the change they bring to the business.