With digital transformation and emerging trends in the market, a change in managing finance and accounting activities is imperative to meet the increased expectations across the board. And CFOs are in the perfect position to take a more focused approach using advanced data analytics as they forge ahead into what seems to be an unpredictable future. Now, one of the biggest reasons why finance functions should be synonymous with deep-dive data analytics is that it gives them more ownership over business-critical decision-making processes. Let’s face it – this function has always been led by data. It’s just undergone a sea of changes regarding how quickly this data can be accessed to make intelligent decisions.
Today, gone are the ways when they had to laboriously coordinate with multiple teams to get the information needed to shape short-term and long-term financial strategies. One could strongly argue that there is a greater need to use analytics, especially with COVID-19 causing a major change in how enterprises are managed across the globe. The CFOs deploying data analytics ensure that enterprises remain strong contenders in a competitive market as they can offer superior performance and resiliency, thanks to:
Advanced supply chain insights:
Advanced analytics in the supply chain offers insights that help enterprises navigate the market changes, irrespective of how sudden they are. Supply chains constantly seek to cut costs and improve profitability in different scenarios to pre-empt potential disruption risks.
Access to data in real-time:
With smartphones and access to data, CFOs can stay connected in real-time to data and systems and track all traditional metrics, including accounting activities such as receivables, invoicing, and working capital. They also have immediate access to data analytics on services, products, and market trends to help stay ahead of the game. In addition, CFOs can manage enterprises by handling the recent disruptions in their relationship with third-party logistics providers, address production lines to meet in-demand manufacturing needs and offer complete visibility into customer-centric data.
How CFOs Can Lead with Data Analytics
To start with, CFOs must shift from the traditional role that dealt with managing the enterprise through planning, budgeting, and forecasting, to a position more in line with the immediacy of running the business on a daily basis. Traditional finance functions need to become integrated with advanced data analytics to evolve into digital operations across all areas of the enterprise. And running the enterprise includes real-time operational decision-making involving business units and sales.
CFOs are uniquely positioned to ensure centralized control of the strategies and decisions using real-time customer data. Advanced data analytics provide a solution to respond immediately to market volatility with deeper insights and predictive analysis. It is a given that insights through customer master data go directly to the bottom line, and CFOs would do well in going beyond the scope of traditional finance activities to lead business data analytics. In a way, this scope expansion can help avoid losses due to operational cracks as data analytics, by nature, offer predictive power to enhance the functional structure of an enterprise.
CFOs can now leverage the analytics and metrics offered by data analytics to focus on more than merely the speed and cost dependent on procure-to-pay, order-to-cash, and record-to-report. Thanks to advanced analytics, CFOs are empowered to accelerate cycle times and enhance the activities, processes, and performance that go above and beyond the financial aspects of the enterprise. CFOs can take their functions to a digitally transformed market space to work towards improved and informed decision-making in real-time through greater data access and visibility.
CFOs can also provide greater insights into finance with a deep dive into all available data across every segment, including sales, supply chain, and operations. Moreover, advanced analytics helps mitigate risks caused by the market’s volatility and all the accompanying variables. With a few steps, CFOs can:
- Access and analyze internal and external data accurately by keeping it in-house and centralized.
- Develop new governance structures, technology, and skills to use the larger data sets and data fluidity caused by digitization.
- Adopt effective measures for data governance at an enterprise level as the finance department also has a stake in ensuring data integrity and compliance with governance policies and procedures.
- Ensure the finance teams have the required digital proficiency and are future-focused.
As the need for accelerating the speed of digital transformation continues to evolve, CFOs are taking ownership of data analytics. This is a natural progression, given that they have traditionally used data-driven analytics for business strategies. Applying the same analytics to making operational decisions to improve and expand the business beyond the core finance functions makes for an ideal partnership between finance and data analytics. And of course, pairing core skills with knowledge in technologies including AI and automation is a must. The evolving mindscape of the finance teams has to grow with the continuous improvement of analytics.
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