How can finance departments and CFOs better support innovation and growth in their companies, in a world defined by constant change, increasing complexity and innovation? This is not a new question but still an interesting and important one.
Successful finance departments are no longer just reporting the numbers and ensuring compliance but are being asked for data and analysis to help shape / make business decisions. A Strategy and Business article: “The Redefined No of the CFO” talks about how CFO’s need to be able to ask the right questions and then provide the right insights.
Today, more data is available to be analyzed by more people; answers are required faster than ever, but that does not mean that the data is easily understood. So getting the data faster is important, but ensuring people can understand the data and make decisions based on it, is what makes it valuable. This is summarized well in CFO Research 2014 - Creating the value added finance function “decision makers must get information faster, absorb and analyze it faster, and make adjustments faster.”
So what are some key elements to be able to provide the right insight to many decision makers?
Have data in real time and from many sources, be it transactional and/or analytical information.
Allow decision makers to access the data themselves wherever they are.
Enable unlimited flexibility on how to analyze the data and be able to do many what-if analysis and simulations to assess options quickly
Many companies are striving to do this but are still finding challenges along the way. The CFO research shows that although a majority of respondents say that their systems are self-service, many say it’s still difficult for managers to understand that data.
However significant innovations in IT, such as in-memory technology, the ubiquitous use of mobile devices and the ability to embed predictive algorithms in real time processes can help. These innovations are now making it possible for CFO’s and finance departments to address critical issues, such as providing data in real time, to support innovation and growth. Very few finance departments (<12%) say they can provide data in real time according to CFO research at the moment and this would help improve planning processes and collaboration across the enterprise increasing the insight to decision makers. It would also improve the ability of decision makers to simulate and compare multiple scenarios quickly so that they can make informed decisions that can speed up business growth or organizational change.