With the rapidly changing economic landscape, the roles of CFOs and Finance leaders in business have transformed into that of strategists and innovators. More than ever before, business people are relying on their Finance leaders to drive strategic initiatives and business growth, not just report the numbers.
To meet this shift in roles, the new breed of Finance leader is increasingly becoming data-driven, using quality data combined from multiple sources to put strategic decisions in context and choose the highest-impact business direction.
How Finance leaders use data to support decision-making
Data-driven Finance leaders use metrics to grow the business and software with machine learning (artificial intelligence) to model and compare ‘what-if’ forecasts. In response to changing circumstances, real-time data is used to understand variances, isolate issues and identify possible solutions or opportunities for future growth.
Rather than overload business leaders with as much data as possible, Finance leaders should guide decision by refining it. By presenting insights from their analyses and using data to support recommendations, Finance leaders can help overcome analysis paralysis, rather than be the source of it.
Data-driven Finance leaders are only as successful as the teams supporting them. Fostering a culture where data is trusted and relied upon to inform decisions is essential to meet objectives.
So, how data-driven is your team?
ways to make your team more data-driven
We’ve sourced the top 10 ways to make your team more data-driven:
- 1. Create a data-driven culture – empower all employees to actively use data in their daily workflows and promote collaboration between different teams to make initiatives more successful.
- 2. Provide access to quality data – make data accessible to all employees who need it to make decisions. Present data in the right way so that information is understandable, useable, and interoperable.
- 3. Improve data literacy – provide training to ensure end users can understand and interpret data and use it to make better business decisions. Provide teams with self-service tools to speed and simplify data preparation and analytics tasks.
- 4. Understand that data is an asset (not a by-product) – design systems and processes around what data is needed to solve problems or achieve goals.
- 5. Treat data as an integral part of the business – define and examine business goals using data. Track, test and re-evaluate past strategic decisions and use this data to set company direction and strategy. Enforce the expectation that data will be used to evaluate every decision.
- 6. Avoid ‘vanity metrics’ – ensure that data collected helps you understand performance in a way that informs future strategies. Analyse and address negative data that reflects poor performance.
- 7. Reduce data bias – create analyses with diverse departments and levels; including different perspectives throughout the process can reduce data bias and maximize potential solutions.
- 8. Create an agile environment – employ powerful tools and a platform that encourages collaboration (for example, allowing discussion) and supports multiple roles. This improves collaboration and enables informed, confident, rapid decision-making.
- 9. Invest in data collection and constantly improve your data stack
- 10. Use modern governance methods – protect and manage your data to prevent data degradation and decisions made based on poor data.
Don’t let the length of this list deter you from starting your journey. A solid corporate performance management (CPM) strategy backed by technology can help create a systemised approach to bring together disparate data and cover many of these items.
Where to begin?
To position yourself with the best chance of success in a data-driven world, you need to empower your employees with quality data and the right training and tools.
CALUMO offers powerful and flexible software backed by a Professional Services team who can work with you to design and implement an integrated reporting and planning solution and provide guidance on how to achieve your strategic goals. To speak to one of our consultants, please contact CALUMO on +61 2 8985 7777 (Aus), +1 214-387-6030 (USA) or email@example.com.