It's all about the data
Data should be managed as a valuable asset by people with clearly defined roles and responsibilities.
Looking for the best data brokerBut is the creation of a unified data organization a responsibility that Finance should (and can) take on?
In many companies, this question remains unanswered. Of course, some CFOs do have that ambition and are keen to building on their traditional task of managing data entry and data analytics. But times have changed and, in view of the enormous rise of data gathering (besides purely financial data), one might also consider attributing the role of data broker to the Chief Data Officer or Chief Information Officer.
On a side note, regarding data consolidation and governance, it is important to decide whether data should be stored and maintained in the ERP system or not. That is still the case in many companies but, increasingly, a central data management platform – consider it an ERP for data – is preferred because of the efficiency gains that can be made. In this second scenario, data entry happens in a broad range of systems. It is then collected and consolidated in the master data management platform that acts as a single system of record. The result is a clear distinction in roles between the ERP, which manages the processes, and the master data management tool, which manages and maintains the data that then feeds those processes.
Meeting business needsSo far, the role of Finance in data management may seem logical. But when it comes to sharing data in order to then leverage and monetize it, tensions inevitably rise between Finance and other roles – and even more so when a new role comes into play, i.e. the Chief Data Officer. Business users expect both static reports on trends and dynamic reports that allow them to drill down for more advanced analytics. At the moment, it is often a struggle for them to obtain these reports in the right format, at the right time and providing the right insights.
Finding the best organizational structure to meet these needs is easier said than done. One might even expect the role of IT to evolve into that of managing the infrastructure, with the responsibility for data and information being transferred to the Chief Data Officer. But what would that leave Finance with? Nothing more than traditional number-crunching tasks? CFOs who want to prevent this shift need to be aware of the importance of business partnering and analytical skills that are needed to safeguard their role and responsibilities in the digital age.
These new skills and mindset become even more important when data needs to be leveraged and monetized. Think of marketing automation campaigns, for example. If such campaigns are not supported by the right data in the right context, you end up wasting a lot of money plus you risk losing customers who are irritated by misaligned campaigns.
Strong teamworkWhile Finance is well placed to cover the protection and governance of data, its value-add in the more advanced aspects of data brokerage is more doubtful. Probably one of the most valuable scenarios would be one of co-creation between Finance and other roles, building on the strengths of all partners involved. But again, such a shared responsibility demands a mindset and skills that are not always embedded in Finance’s DNA. So while it might seem a long way to go from number-crunching to data management, it is definitely a scenario worth considering.
This article is the third of a series of 6, in which I dive deeper into the 5 challenges CFOs are facing today.
I also shared some of my findings in the report `Fast Forward Transformation or Back to Basics?’
Author: Thierry Bruyneel. You can connect with Thierry on LinkedIn.