Why CFOs are shifting from big data to speed, accuracy and simplification

There is an increasing need for CFOs to become familiar with financial sector technology and influence its advocacy. The aim is to create efficiency through automation and rationalisation, as well as foster capacity for intelligent data evaluation. How has this new relationship with data altered the CFO's scope – and what does it mean for their department's skill set as a whole?

Our interviews with CFOs from SMEs to multinationals have revealed four key ways of approaching data to ensure their organisation can advance and prosper in uncertain times.

Few things are more truly useful in the finance world than a well-crafted report that highlights a company’s key operations. With today’s mania for ‘big data,’ the very fact of reporting has become, in the words of Conotoxia’s CFO David List, “the query function.” A CFO’s ability to use databases adeptly and leverage sizeable data reports for business decisions is key to fully functioning as a modern CFO.

Data accuracy is more important than quantity

From software tools to database servers that store and retrieve information for immediate reporting, the true power of data has never been closer to hand. 

The integration of data into the finance function through technology and increased collection poses an immediate challenge for the CFO in terms of filtering and using the figures to support sound business decisions. Having the data is one element – being able to quickly and accurately analyse it is another. As Andrea Wesson, CFO of Eversholt Rail says: “Data storage, filing and access take up a lot of time. We have data that could be more valuable than it is – it’s there; it’s just difficult to find.”

The CFO is the funnel turning data into strategy

By coordinating the business around key data, the CFO inhabits a trusted position in a company’s senior management team. As Marathon Capital CFO Bob Braasch points out: “You are helping the CEO take the company to whatever the next step might be”.

However, challenges may arise when in dialogue with fellow senior leaders who make less data-centric decisions. Ryan Mangold, CFO of Taylor Wimpey, explains, “Data is useful in to aid decision-making – but the majority of decisions are made by individuals who simply apply the data. I think the soft skills of the CFO are ultimately more important than the technology.”

The CFO as Pilot will tend to push for the integration of all systems across a company. The birds-eye view and strategic influence ensures that market opportunities are not missed through extended decision loops. As David List explains: “Every transaction has to get into the books and records of a company. So, the CFO is always going to be at that point in the funnel where everything must come through, and fit, and be streamlined and usable. It’s inevitable that the CFO function is going to have to drive these changes.”

Data and its analysis should not be in a silo

As the Coach, the CFO takes the lead for the dissemination and advocacy of both data and technology in an organisation. A coach will veer towards their people to best use the technology to make better decisions – and to coordinate with other senior leaders to ensure no duplication of technologies in different silos.

As the CFO of an investment bank says, misalignment among teams can be harmful: “It’s weird if the finance department is focused on developing its own tools. Working this way is the kind of the thing that can make our lives miserable. If you are thinking in silos, you are not solving anything.”

CFOs can add huge value by being the link between the data collected, deciding what it means and how to present it to their people. In the CFO of a packaging company's eyes: “I work with both analytical skills and a people approach to be able to manage the company and all the variables employees need to get good results. So numbers are the world, yes, but to make that happen you need people.”

Reimagining the finance function from a data perspective

When technology and data are approached from the perspective of the Engineer, the CFO is following a path ensuring new systems and data integrate with existing ones, maintaining quality and reliability.

It gives the opportunity to reimagine what the finance function should be when the department has the ability to spend time working cross-functionally, supporting decisions made with the company strategy in mind, developing systems to provide accuracy and efficiency. “If you look more at the CFO scope, the key opportunities are obviously automation from a shared service centre and the transactional aspects of finance,” Philippe de Briey remarks.

Ryan Mangold, CFO of Taylor Wimpey, explains the key is reporting on the data that matters, not simply the data collected, meaning time and energy are spent more productively. “Data has changed and impacted the role a lot because you’ve got a sea of information now and we’ve got to make sure that we’re looking at the right information to make business decisions. To truly challenge ourselves in our role is vital.”

By being both a Coach - supporting the leadership team to better understand challenges - and a Scientist - devising new ways to extract, analyse and explain the figures in a language accessible to all - the CFO can add huge value in his or her role.

Key Takeaways

• Both the storage of and access to data are as important as its analysis
• Data is useless without accurate accurate and timely interpretation
• The CFO competes with the CIO and the CDO for dominance in the integration of new technologies
• CFOs as engineers must integrate new systems into old existing ones, maintaining service quality and reliability
• A harmonised approach to system implementation and use should be taught by the CFO to other board members and senior management

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Find out more about the other key challenges facing CFOs in 2018

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