Most businesses didn’t have someone in charge of all their data – ensuring data is valid, accurate, reliable, and available, or asking if it’s being reported objectively and responsibly.
Finance teams have long relied on good data, relating to financial performance or results. Now, with all these external factors pressing for good data too, it’s time for the Finance function to step up.
Finance professionals are taking on a critical role as the company’s “data stewards”. In fact, research done by IDC revealed that data and analytics solutions revenue in the Asia-Pacific region were estimated at USD$22.6 billion in 2020.
Finance relies heavily on the cloud for analytics and insights to balance numbers with strategy, generate the results stakeholders crave and ensure staff aren’t overwhelmed by the data.
Data analytics is also actively used by financial regulatory authorities such as the Monetary Authority of Singapore, where we see it used to combat money laundering and financing of terrorism.
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A new dawn for data
Undeniably, data decides business success – provided businesses have the means to analyse and understand it.
This task now increasingly falls to Finance. Data has always been important to the Chief Financial Officer’s (CFO) role, with every decision they make based on and justified using data.
Yet, their job no longer focuses on the preparation and maintenance of it – not when there are automated tools and data teams at the ready.
Instead, their emerging role is to interrogate, interpret and exploit data for the rest of the business. According to Deloitte, finance leaders use data to understand and monitor business performance in real-time, making them more reliable and informed decision-makers.
The CFO is not only recognized as the right hand of the CEO but is also a trusted advisor and collaborator for every part of the business.
The stark difference now, for finance teams, is that they’re obliged to source data more widely, from every corner of the business. However, there’s a big difference between the ownership of data and the stewardship of data.
While one department may have generated huge quantities of valuable customer information, if that data can’t be accessed or understood by others, it’s no use. That’s why data needs to sit in one team’s domain, interpreting that data for the good of the whole business.
However, framework, technical and political reasons make handing the reins over to the finance team complicated. Most organizations are a complex patchwork of legacy data environments, lacking an overarching data strategy. This makes data stewardship achievement difficult.
Most executives understand that data is power and it’s what gives their department its value to the business, but it also makes them reluctant to share data with others. The outcome is – Finance struggles to get the data it needs.
The tools of the trade
CFOs need a good data strategy to figure out what data is most important to the business and what it needs to do with it. It’s also equally critical to ensure that the right skills are there.
Data analysts will offer the most valuable gain from data – a gap possibly filled through new hires and upskilling across the business.
The lesson is this: have the governance, reporting requirements and right people in place first before you attempt to exploit the data.
It’s easier to build a data strategy over infrastructure when you’re starting from scratch, i.e. younger startups. Yet, building a new data strategy and data infrastructure needs to be done concurrently while running the old systems in parallel to maintain service continuity. Upon migration to the new data infrastructure, these legacy systems can then be shut down.
The cloud must be the central ‘brain’, connected to all data environments through a digital nervous system. Finance has easy access to abundant data sources through the cloud and the latest tools for keeping that data clean and properly managed.
These benefits and access should be given to all departments so the cloud helps free up employees to focus on business growth.
Finance at the helm
CFOs and their teams have the objectivity, experience and ethical code to be the ideal data stewards. The next step is to get the right tools and understand the strategies they need to build an organization that’s truly data-driven.
A cloud-based infrastructure that is built off the back of a watertight data strategy offers an unrivalled breadth of insight and the tools needed to realize data’s true potential. Only then can data become the common currency by which business success is measured.