Times have certainly changed for Chief Financial Officers and interim CFO Recruitment. No longer viewed as the company number crunchers who summarize revenue and analyze EBITAs, modern-day CFOs are expected to take on a whole new range of responsibilities. This includes expanding their role to become strategic partners with a long-term vision on how to add value and grow their business. Today’s best CFOs set the bar high: they are visionaries who know not only know how analyze data across cross-functional areas of business, but how to optimize operations to improve the top- and bottom-line functions of their business.
At the heart of this evolving role is data. CFOs who excel at using business intelligence and analytics to drive actionable insights are positioning their companies for repeatable success and a distinct competitive advantage. To truly get a look at how the data landscape is reshaping the role of CFOs and interim CFO Recruitment, we took a deep dive with a long-time Finance and Business Intelligence leader who is well-versed in all facets of finance, BI and data analytics. Here are his insights.
Can you start by talking about the role of data in today’s competitive landscape?
Data is the new oil for businesses in the 21st Century. Take, for example, today’s top global leaders like Google, Amazon and Facebook. Their ability to make data-driven decisions better and faster than anyone else is what has helped those companies surge ahead of their competitors. But while data has proven to be the secret sauce for these industry giants, organizations, small and large still struggle to get the most of out of their business data. Data presents internal challenges at many different levels. Add to that the outside pressures from an increasingly globalized economy: technology innovations are faster than ever and competition is rampant. Markets are more fragmented and specialized than ever, meaning companies are forced to respond to customers’ needs with higher degree of precision in order to differentiate themselves.
What are the biggest challenges that “big data” presents on an organizational level?
For any given company, an enormous variety of data exists – and that continues to increase as companies deploy multiple functional applications and/or use different datasets to manage various part of the business. Let’s take the following simple example: data from your Sales Force application shows that your business has grown by a certain percentage. Your manufacturing data, on the other hand, reports on products and how quickly you delivered products to customers. These two applications don’t necessarily “talk” to each other, though – and as a result, your data is extremely siloed. Gaps exist across each of your functional areas, and strategy leaders struggle to connect their data in a way that helps them optimize operations and stay competitive. From an organizational standpoint, departments generate data without any incentive to integrate, share or think outside their domains of expertise – and the expertise required to prepare, clean and blend that cross-functional data is limited. This challenge is exacerbated by the existence of “dirty” data: data that is inaccurate, incomplete and leads to unreliable forecasts.
How do the challenges described above give rise to a new “breed” of CFO and interim CFO recruitment?
For most companies, the sheer volume of data isn’t necessarily the problem. It has more to do with the way in which data is processed from its sources, connected and converted into meaningful insights. Consider the traditional organizational hierarchy, which places domain expertise into silos by nature of communications between managers and employees. Data is treated the same way, reported up from a silo along the chain of command. When a company “summarizes” its data in a bottoms-up approach, they inevitably reduce context and rely on human filters.
The reality is this: domain experts are not looking across departments in the same way as a CFO or CEO does. CFOs already engage with sales, marketing and other operations, meaning they are already in a position where their work is cross-functional. With this all-encompassing perspective, CFOs are well-poised to undertake the role of a leader and use data-derived insights to drive organizational success.
Where do business intelligence and analytics fit?
In order to empower the use of financial planning and analysis in business decisions, CFOs need to develop new business capabilities that bring together business knowledge, functional data, technology and human assets needed to grow top-line revenue and bottom-line profits. In other words, they must rely on Business Intelligence. BI gives them the ability to integrate data in meaningful ways, and respond positively to the following types of questions:
- Do you have a holistic view of the business? Are you able to zoom in to the “hows” and “whys” behind your data, then zoom out to identify areas for opportunity and growth?
- Can you predict the future and different scenarios of outcomes with ease? Does your organization have the ability to view the business according to its interdependent business processes?
- Are you able to monitor performance metrics across different functions to prescribe optimal decisions?
- Are you able to gain competitive superiority? Can you quickly feed actionable insights to speed up cycles of plan, execute and measure?
Can you explain how BI is transforming the role of CFOs?
By tapping into the nerve center of business data, CFOs are embracing the paradigm shift from reporting business results to monitoring performance. Visualizing the business model and performance enables them to proactively manage multiple business elements, and help them transform their business into an intelligent enterprise that produces revenue-generating insights, cuts costs of managing data across disparate systems, and improves efficiencies in strategic planning speed and accuracy. This is a new way to make superior decisions and pull ahead of competitors who cannot keep up in cycles to plan, execute and measure. All in all, the pace of global economy effects your competitors as much as it affects you. The CFO who is able integrate data silos, view their organizations holistically, and build business intelligence is able to give his or her company a strategic and tactical advantage in the marketplace.
Categorized in: Financial Planning & Analysis