CFOs need to navigate a sea of data to deliver analytics to their organisation. Here’s how.
If Finance misses the opportunity to lead the way on analytics, it also misses the chance to evolve into a true partner to the business. (Deloitte). This is particularly relevant given a recent survey of 100 CFOs. According to the survey, 42% of Finance leaders want to “spend more time on analysis and communication with the business”.
The CFO is in a pole position to take the reins on analytics in their company. To do so, they must invest in their people and use the right tools for the job. They also need to ensure that analytics is being used to solve real problems. Finally, they must be accountable for ensuring that data is actually used for decision making.
CFOs are best placed to navigate their companies’ journey into analytics.
A recent survey found that CFOs are placing a priority on advanced analytics (38%) and machine learning (29%) (finadium.com). The desire to invest in analytics is understandable. It represents a fantastic opportunity for Finance to be in the driving seat when it comes to shaping strategy for their companies.
Finance has been the consolidation point for company data for a while now. Finance staff often utilise data relating to financials, production, inventory, sales and marketing. Finance staff are also often the most data literate. The CFO and their staff are the logical owners for analytical initiatives.
The analytics opportunity also presents Finance leaders with one of their biggest challenges. After all, Finance has traditionally focused on delivering information, not insights. To be able to deliver analytics to their organisation, CFOs must invest in a combination of people and tools.
CFOs must invest in (the right) people for analytics
Not surprisingly, the successful delivery of analytics relies on the people doing the work. CFOs need to invest in small groups of talented staff for analytics projects. They also need to hold themselves accountable for using data for both strategic and operational decision making. (Deloitte).
Staff need to learn the tools and techniques that will allow them to create analytics solutions:
- Data wrangling, to structure, enrich, cleanse and validate data.
- Basic statistical knowledge.
- Data visualisation and storytelling.
- Knowledge of tools for automation, data management and analytics.
It is important to note that the “hard” skills described above can be readily learned. Search Google for “Data Analytics Course” and you get 915 million results! Everything from DIY, video-based courses to university degrees. There are, however, fundamental behaviours and traits that CFOs must look for in the analytics staff, including:
- A high sense of intellectual curiosity and inquisitiveness.
- An interest in understanding the “big picture”. Staff must be able to identify the real business problem for which they are solving for; while also
- Being detail oriented. Data analytics requires a high degree of attention on the quality and accuracy of data.
- The initiative to think outside the box when creating solutions.
CFOs need to find the right people for the job. They also need to foster a culture of innovation.
We recently published the five key digital skills that Finance teams need for the analytics age. You can learn more and download a template for scoring staff on digital skills here.
Finance must use the right tools.
CFOs must invest in tools for analytics that align with the challenges they are looking to solve. That said, there are some harsh realities facing most Finance departments:
- Most of their data is trapped in legacy systems. 76% of companies say this is the case.
- The fact above means that Finance must aggregate and cleanse data – often using Excel.
- Finance staff rely on others for their source data (as much as 62% of people).
- Deloitte estimates that Finance staff spend 50% of their day creating reports
CFOs must see past the “bells and whistles” and focus on essential features when selecting tools. For example, can the tool:
- Work with both modern data sources (APIs) and legacy system extracts (text/CSV, Excel, Access etc.)?
- Aggregate and consolidate data with minimal effort?
- Map and join data – such as performing a lookup of product codes to return a full product description?
- Transform and cleanse your data – such as replacing characters in a string or removing leading or trailing whitespaces?
- Validate your data, extract exceptions and present those exceptions to staff for review?
- Perform simple through to complex calculations. Does this include everything from basic, row-based calculations through to forecasting and machine learning?
- Produce information in familiar and trusted formats such as Excel, Powerpoint, Word and PDF?
- Interface with your preferred BI technologies (e.g. Yellowfin, Tableau, PowerBI etc.)
- Trigger workflow and alerts based on certain outcomes and KPI results (e.g. actuals falling short of the plan)?
- Introduce governance and audit controls to the flow of data used for the analytics?
SolveXia is a popular, Finance-specific, tool for managing data and automation. The software focuses heavily on the toolset described above.
Right Skills + Right Tools + Solving the Right Problem = Winner.
If CFOs are to take the driving seat for analytics, they are going to need to invest in the right people and ensure they have the skills and tools to do the job. CFOs must also ensure that the right problems are being solved through analytics. This means:
- Starting with problems – not data. A common mistake is to attempt to create analytics simply for the sake of using data that the company has collected. A clear definition of the problem is imperative. It will act as a compass, informing decisions made on the tools and techniques that people use.
- Being accountable for the use of data to make decisions. The whole point of investing in analytics is for data to inform and drive decisions across the business.
In an age of digital disruption and company transformations, the CFO is more vital than ever before. 85% of CEOs (source) believe the surest way to profitable growth is in their Finance departments ability to analyse data and produce meaningful insights. Needless to say, the race is on. Finance leaders that are able to take advantage of analytics will help propel their companies to new heights and in doing so, elevate the role of Finance as a strategic catalyst within the company.