Data. It’s everywhere. It’s everything. It’s the underlying phenomenon behind the best (and worst) decisions, and it’s something that financial professionals can’t ignore. As a society, more data have been created in the past two years than in the entire history of the human race before it. In the next four years, the digital universe will grow tenfold from 4.4 zettabytes to 44 zettabytes (44 trillion gigabytes).
Now, you know within your organization you will not be facing all of this data flowing in and out of your organization, but for the data which you can control, it is important to turn it into useful information and understand how it affects the past, present, and future of your organization.
The Risks of Standing Still in a Modern Organization
While CFOs are taking strides to find new platforms that can manage and utilize this data, one of the most important qualities that got you into a financial leadership role in the first place was your risk-averse and pragmatic nature.
However, by not making any kind move, you’re setting yourself and your organization up to be making ill-informed decisions—a risky maneuver in itself. Knowing this, one of the hardest things for CFOs seeking a data strategy is finding where to begin.
According to Rodger Howell, Principal at Strategy&,
“CFOs are expected to be strategic partners in the C-suite responsible using data-driven insights to enhance profitability, efficiency, and operational success. This new kind of CFO is unlocking the power of big data in order to support his or her company’s long-term strategy and vision.
Understandably, the sheer abundance of information generated by even a moderate-sized operation can be overwhelming to CFOs who have not yet begun to extract and analyze the data available to them. Data sources can be internal or external, structured or unstructured, and useful or useless. Finance professionals are likely to wonder where to begin.
There is no one-size-fits-all approach to becoming a data-driven CFO.”
Leading the Finance Organization’s Transformation
To address this, CFOs need to be able to make knowledgeable moves as a leader, starting small and moving the organization forward into the future. A recent Intacct blog looked into the most important leadership qualities of a CFO, which can be used to address the challenges that come with Howell’s six steps to implementing an effective data strategy as a CFO:
- Setting Goals and Objectives
- Engaging with the Rest of the Organization
- Proposing Pilot Projects
- Collaborating with IT and Data Experts
- Ensuring Accuracy
- Seeking Feedback
Lead By Example, Practice What You Preach
It is vital for CFOs to set direction and create an environment to cultivate greatness in each employee.
To do this, you must show them the way by doing it yourself – do the right thing, at the right time, for the right reason.
If your team knows that you will also do whatever you expect from them, they’ll likely work hard to help you achieve your goal. When leaders don’t “practice what they preach,” it can be almost impossible to trust a leader and enthusiasm will disappear.
Listen, Seek Feedback, and Adapt
A good CFO understands the importance of listening to and understanding their team. After setting an organization’s strategic objectives, it is an imperative that CFOs and finance leaders engage with the rest of the organization to ensure that others can voice their critiques, recommendations, and inputs.
Engaging within the organization will not only help finance leaders understand the capabilities and weakness of the existing platforms, it will also safeguard against any inconsistent analytics methods across the company.
Self-Management and EQ
You’ve gotten this far making pragmatic decisions that are best for the future of the organization. To bring your strategy forward takes self-management and the ability to push your decisions forward, regulating your own actions rather than blindly responding to emotion and impulse.
Stay Positive, Stay Focused, and Stay In Control
Encouraging your team to work more efficiently and effectively starts with you. As you lead your organization into the future of financial data management, it is important to remain committed to leading by example.
By remaining positive and productive, you inspire your team to do the same. Not following your own advice will result in losing the trust and respect of your employees, and could derail your project.
Govern and Regulate
As you push the financial function forward, you must realize that with great data analysis comes great responsibility. Now is a time to look at the processes that your organization uses. You can have world class software, but lack the processes to capitalize upon the software investment, which results in waste and unrealized returns on investment.
Now is the Time to Take Steps Toward Transformation
By taking a prudent yet proactive approach to establishing analytics platforms and processes, CFOs will elevate their role in the C-suite and ensure their organization has the correct business models, platforms, talents, and tools to succeed.
Now is the time to act. With the aforementioned steps, you can push your company to not just survive, but thrive heading into 2017 and beyond. For more information, download Finance’s EPM Playbook: Leveraging World Class Enterprise Performance Management and A CFO’s Guide to Cloud Accounting to learn more about becoming a data-driven, tech-savvy CFO.