Today’s chief financial officers are asked to make better decisions, faster. They must create data-driven business models that adjust to fluctuating market conditions to guide company budgeting and direction. The insights they provide to the leadership team are critical to prevent over- and under-forecasting in the pandemic-related chaos of the supply chain, which can tie up cash reserves in unwanted inventory or affect customer fulfillment.
This means their data integration and analytic tools are more critical than ever. Technical systems that were once the strict purview of the IT department are now entwined with all aspects of the business. As Deloitte points out in its CFO Guide to Data Management Strategy, CFOs need to collaborate with chief information officers in leading data initiatives to enable informed decisions that enhance competitive advantage.
But what does this actually mean?
Despite mountains of data created on a daily basis, the central imperatives of the CFO—accuracy, reliability, consistency, compliance and accelerated reporting—are threatened when the right data isn’t delivered precisely to the right application and the right people at the right time.
According to a recent Accenture survey, 99% of CFOs want real-time data for making decisions, but only 16% believe they’re getting it at the scale they need. The classic trio of tools, processes and personnel—critical for producing a snapshot of business in real-time—is often out of sync.
No single uber-application addresses all the needs of the CFO’s team. Rather, organizations deploy a variety of best-of-breed solutions within the financial tools ecosystem. While these systems are instrumental in addressing complex and critical business needs, they are generally provided by multiple vendors who optimize for specific outcomes.
The challenge is that lurking beneath the shiny facade of the finance application ecosystem is typically brittle custom code, disjointed tools, redundant scripts and dusty manual processes. These disconnected processes can prevent the applications from “talking” to each other, putting data integrity in question when a change in information in the source system may not flow properly and completely to downstream applications.
Extracting and integrating data from the complex web of multiple applications in which it exists represents a significant burden for Finance and IT departments. While most systems have some form of built-in integration, it is far from seamless. These are generally operating as point solutions without a broad integration strategy across the enterprise, even if the “enterprise” may be simply a finance-specific system. They also usually require more skill and specialization than that of a typical business user—not to mention patience and precision.
Traditionally, it’s an exclusive group of skilled people within a company that manage data flows for reporting because of the complexities in integrating data pulled from disparate applications. The finance manager pulls data from one application and uploads it to another, manipulating it manually while praying that the information will blend in the appropriate way, in the right column and in the right format. Making it all work is frustrating and ripe with potential for unreliable data and non-conforming standards.
This scenario is inefficient, inflexible and unscalable. It also introduces unnecessary risk, as it is difficult to create a full audit trail of who made what changes, and when. Inconsistent or non-compliant finance systems cause delays and increase both cost and anxiety.
Rather than locked into silos with keys held by the skilled few, data must be freed to flow so business reporting can be made credibly, authoritatively and in a timely manner.
Eliminating manual processes and streamlining the data consolidation process is key. What’s needed are automated workflows, schedules and rules to exchange data between systems in the desired format “under the hood.” People shouldn’t have to handle data integration on a case-by-case basis; their systems should do it for them. The objective is to open a broader swath of business use in various finance application processes and be able to diagnose potential issues in critical planning initiatives.
The human factor
As Gartner found in its recent survey of CFOs, there’s a mismatch between the new technology available for integrating and managing data, and the people who use those tools. The barrier to smooth real-time reporting is not only a lack of the right equipment, but the lack of people with the “digital ambition” to see beyond their current methods and embrace new systems and processes.
While finance managers may be comfortable with certain applications, they don’t know others and may be reluctant to try new systems. That presents a problem. With the current pace of technology development, what worked fine a year ago might be hopelessly outdated today. Cultivating authentic staff interest in how new technologies can improve work and business outcomes is essential.
Accenture’s Q4 2020 survey showed 58% of CFOs as concerned about having the right talent to carry out real-time scenario planning, while 43% say technology is the biggest barrier to their ability to provide real-time insights. So they go on, deploying small solutions that solve their specific need-of-the-moment, without really addressing evolving data access, integration and utilization shortcomings.
A new balance
The truth is that CFOs are hamstrung in their ability to provide data-driven strategic guidance to their leadership without finance systems that can be relied upon to successfully and precisely connect, automate and enrich data from across the company. Data only reaches its potential when it is as clear and as unambiguous as possible, and married with other data to reveal patterns.
At the same time, a CFO shouldn’t have to become an expert in the latest computer science to get the job done.
A new balance of ownership between IT and business users is needed, and that requires systematized and automated data integration. CFOs can go from just “having data,” to having precise, trustworthy data that enables better decisions for achieving the best outcomes, by implementing cross-application processes that automatically coexist on-premises and in the cloud for the whole organization.
It’s high time CFOs demand data integration infrastructure that reduces complexity and manual processes. It’s the only way to paint a more complete, accurate portrait for the budgeting, forecasting and compliance reporting that makes a difference to their company and its future. Their systems must serve the business—not the other way around.