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Take a moment to think about all the data generated during the course of a single business day. New customer profiles. Sales logs. Marketing touches. Payroll allotments. Service records. Inventory rolls. No doubt, in a single 24-hour period, a business retains specific, detailed accounts of a massive number of transactions. But what does it all mean?
The nexus of all these information streams: Your finance team. "They're at the confluence of where these data sources come together, and they have a great opportunity to drive the use of more data in the business operations," says Rich Clayton, vice president of Oracle's Business Analytics Product Group.
Yet, simply gathering the information isn't the same as maximizing its use. Clayton offered his insights for how finance teams can lead their organizations toward a more data-focused future.
- Connect your data. This may seem obvious, and yet many organizations invest their technology dollars into separate software applications, each serving a different purpose and with little or no synergy. The result: Lines of businesses rely on disparate information sources, providing varied views of the business. Modern, cloud-based ERP and EPM systems can integrate your data, streamline communication between LOBs and offer finance and other business leaders one reliable source of information. "It's a prerequisite before you do anything else," Clayton says.
- Automate, automate, automate. Accenture's Meet the 2020 Finance Workforce study estimates that only 30 percent of future finance staff will focus on by-the-books tasks, while the rest will be "data gurus who connect with the business." This is thanks to automation, which frees up finance teams for this higher-value work. "It's hard to become analytical if your basics aren't automated," Clayton says. If you haven't already, start exploring which finance tasks you can automate. Tedious, manual accounting tasks such as account reconciliations, transactions matching, journals and internal transactions are prime targets.
- Understand the business drivers. Regardless of their industry, data-driven finance teams often have one thing in common: They're curious about the broader business drivers. They dig into the data that ultimately affects the company financials. For example, Clayton recalled the anecdote of a CFO of a large hotel chain, who was interested in understanding how the guests' experiences correlated with the company financials. The company's finance team examined its social media activity by property, and discovered that complaints impacted the financial performance of individual hotels. The result: A new policy for how the chain's hotels handle complaints, based on data and distinctly tied to financial metrics.
- Align corporate finance planning with operations planning. It's not uncommon for large organizations to discover that their finance plan bears no resemblance to their operations plan. This may happen because the finance team didn't share the assumptions driving their forecasts or because individual lines of businesses relied on different metrics. "There are so many ways to get out of sync," Clayton says. If your LOB plans don't roll up into an overall corporate plan, that significantly limits the company's ability to run new business strategy scenarios or develop cross-functional KPIs.
- Build your team's analytics expertise—and your own. Finally, creating a data-driven organization means developing your own staff as well as hiring to round out in-demand skill sets. About half of CFOs report that they're looking for new hires with data analysis and modeling skills, according to Skills and Talent Outlook, The Hackett Group, 2014. Finance leaders should also look to deepen their own understanding. "The best thing finance managers can do is to take a data scientist to lunch," says Clayton, who also suggests taking courses in data analysis.
The future of finance is rapidly approaching—and finance teams centered on data analysis will drive tomorrow's most successful organizations. Find ways to put data at the center of your team, and your entire company will benefit.