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BEYOND SPREADSHEETS: HOW CORPORATE PERFORMANCE MANAGEMENT DRIVES INSIGHTS

By Alok Ajmera, President and Chief Operating Officer, Prophix Software

 

Half a century ago, the first electronic spreadsheet – LANPAR – was introduced to replace paper-based bookkeeping ledgers and make business management more efficient and effective. It was a great tool at the time, but 50 years later more than two-thirds of companies still use a clunky spreadsheet-based approach to corporate performance management (CPM) that is painfully inadequate for today’s complex real-time business operations, sophisticated financial processes and onerous planning needs.

 

Besides Woodstock’s Summer of love, 1969 gave us the first microprocessor, the UNIX operating system, the first ATM, the birth of ARPANET, the debut of the 747-jumbo jet, the first test flight of the Concorde and a baby named Jennifer Aniston. She’s still around but the Concorde and 747 are retired, and the Internet, microchip and UNIX are unrecognizable from their humble origins. The world has moved on and so must corporate performance management.

 

Alok Ajmera

Modern software tools that incorporate machine learning and analytics enable financial professionals to move beyond spreadsheets and into a new level of operational sophistication. They accelerate and streamline budget management, automatically pulling in data in real time data from a myriad of systems, enabling the creation of comprehensive, insightful forecasts and plans.

 

Streamlining Financial Data Results

Automating these CPM processes frees finance teams from the tedious, time-consuming and error-prone tasks of manually collecting data and moving it from spreadsheet to spreadsheet, workbook to workbook in order to generate actionable insights. With data collection and report generation automated, finance teams become value generators rather than number crunchers. They can focus on applying the insights their data provides to business operations, increasing competitiveness, improving profitability, minimizing risk and driving results.

 

For example, with meaningful access to data in real time, finance professionals can build dashboards that provide comprehensive, easy-to-understand holistic views of performance. This is the Holy Grail of one true picture of the company. What is working, what isn’t working, and what will and won’t work in limitless what-if scenarios?

 

This one true picture is essential to simplify analytics, streamline workflows, and ensure optimal data governance across the organization, which is of course essential to financial teams in meeting compliance requirements.

 

Automating and integrating the planning process can eliminate the back-and-forth hunt for numbers and reduce the time to generate plans from months to days. Integrated financial planning also serves to break down silos and fosters collaboration, giving financial teams a more complete and uniform picture of the organization, which enables management to make smarter decisions. Where will more resources create a better return, and where would they be non-productive?

 

But despite the clear cost-benefit and enhanced profitability that automated CPM provides, most businesses continue to slog along in a spreadsheet world, consigning finance professionals to what is essentially non-strategic busy work. Often, by the time data is collected, scrubbed and combined, and reports are generated, the opportunities and risks that management needed to address are long gone. Consequently, leadership teams are stuck in a “good-enough” cycle. As long as the company isn’t in the red, financial performance is good enough. By re-thinking the approach to enterprise performance management – investing a little time and effort to update that process — financial officers can provide an extensive new level of insight into the health of the company.

 

Driving Business Decisions through Trusted Insights

Data is the key to unlocking hidden value and risk in customer relationships, but the data most firms use to manage their own performance is often locked in kludgy home-grown systems. But it’s not enough to collect the data. You have to be able to do something useful with it. For most companies, it’s difficult if not impossible to collect and synthesize their data into meaningful business insights in time to do anything about them. As a result, the relatively small percentage of firms that have automated CPM have a huge competitive advantage. This is true whether data operations are on-premise, in the cloud or a hybrid of both.

 

Different companies have different choke points. By automating CPM, business leaders can identify those choke points in real time and make better decisions about managing their operations faster to create better results. Adapting CPM to operations gives management operational information and analysis much faster, enabling to cut costs and increase effectiveness by managing staffing levels better, reducing administrative burden, closing the books earlier and getting more useful information to sales teams.

 

Now apply that capability to the financial planning process. Instead of starting to collect guestimates several months in advance, automating financial planning with a modernized approach and sophisticated software tools, gives organizations greater insight into their company performance – a shared picture across the whole organization that leads to reduced risk and better business results.

 

The business environment is constantly evolving. Businesses that fail to adapt are flying noisy, fuel-gulping 50-year-old 747s while their more-nimble competitors are winning today’s race with the equivalent of super-sophisticated 787-Dreamliners.

 

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Business

PROTECTING THE CONNECTED CONSUMER FROM REAL AND PERCEIVED FRAUD RISK

Sam Holding, Head of International, SparkPost

 

Experts have researched and observed that when there is an economic downturn, there is often a marked increase in fraudulent activity. Unfortunately, the global financial situation caused by the spread of COVID-19 has been the perfect storm for this kind of behaviour. A quick web search on the topic brings back tons of tips sheets and articles about how consumers can keep themselves safe during such a turbulent economic crisis. While these resources suggest that consumers take simple steps like ignoring robocalls and watching out for phishing emails, the amount of channels through which scammers can take action can feel overwhelming. Due to the increasingly interconnected nature of technology, an attack on one website or communication channel can lead to what feels like a domino effect – taking down a consumer’s personal “stack” one by one.

 

The nature of this interconnectedness has given rise to the “Connected Consumer”. This consumer persona represents the vast swathe of people who have smartphones and have not only grown accustomed to ultra-personalised digital experiences but, as a result, expect these types of dynamic solutions. It should also be noted that this is not specifically a Millenial or Gen Z phenomenon, but rather a trans-generational disposition for easy-to-use technology. While the Connected Consumer isn’t necessarily at a higher risk for fraudulent attacks because of how they interact with technology, the stakes definitely feel higher. Because they may use their Facebook or Gmail credentials to login to countless websites and apps, a single fraud attack can feel like a chink in the armor that protects their whole digital footprint.

 

Sam Holding

With the rise of the Connected Consumer, it’s likely no surprise that there is an incredibly high app adoption rate amongst financial services customers. While people may be quick to download retail banking apps, due to their broader online experiences, they expect a highly personalised experience – something the financial services industry hasn’t always been able to give. In an industry known for stringent security and privacy controls and conservative decision-making, adoption of the latest and greatest segmentation and personalisation technologies hasn’t always been possible. But anecdotally as users, we know that an outdated app experience is not only frustrating but may also lead to concerns about security. If the front-end looks antiquated, what’s to keep non-technical consumers from assuming what’s under the hood is old and lacking up-to-date security measures?

 

The, perhaps superficial, perceived threat around slightly outdated app experiences and the very real threat of fraud requires a multi-pronged course of action to keep Connected Consumers feeling safe. Fortunately, many of the steps required are actually low hanging fruit that don’t require technologists and security professionals to completely change their normal course of action. The best place for financial services companies to start is with their email programs. Since email is the backbone of customer communications when it comes to financial institutions, no amount of attention to detail and care is too great when considering new strategies.

 

The first updated strategy that can keep Connected Consumers feeling safe is applying a mobile-first attitude when sending email messages. This can be applied to the look and feel of the actual email template, but should also be applied to the links in messages as well. Hyperlinks in the body of emails should “deep link” back to the banking institution’s mobile app rather than their desktop site. For Connected Consumers, these deep links show that their bank’s email strategies are in lock-step with their app. And, rather than having to fumble through a website that may not be mobile friendly, consumers can use their thumb print or even their face to access sensitive financial information instantly. Quick and even topical changes like this can show consumers that their information is safe by using the security measures built into their phone.

 

Another easy change financial institutions can focus on to create a more streamlined and, therefore, more secure-feeling experience is improved customer service. Certainly, it’s important for support agents to be friendly and helpful, but in 2020 they should also be fully aware of all of the personalised email messages the specific customer they are trying to help has received. Keeping support teams abreast of the latest email marketing campaigns can close the loop on security regarding customer communications. If a customer has a question regarding an email offer they received, the support agent can authoritatively reassure the customer that the message is, in fact, valid. This creates an unparalleled sense of security.

 

When it comes to security, especially during a time in which fraud is increasing, retail banks can’t take any chances. Connected Consumers need their banks to provide digital experiences that not only are secure but feel secure, a challenge that may be easier to meet than most think. With a few simple changes, financial services organisations can keep consumers feeling safe and stable even when the world feels completely off-kilter.

 

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Business

CHIEF DATA ANALYTICS OFFICERS – THE KEY TO DATA-DRIVEN SUCCESS?

by: Simon Axon, EMEA Financial Services Industry Consulting Director at Teradata

 

Banks were among the pioneers of the new role of Chief Data Officer in the early 21st century, yet the role remains hard to define and under-utilised. Nearly 64 percent of financial services organisations claim to have a CDO, but 72 percent of organisations still feel that it is an unsettled role. Getting it right can accelerate your data strategy and help save the bank of the future from the clutches of Big Tech.

In many banks they started out as a data policy wonk in the IT team, responsible for writing rules to manage data quality. They had little power and no budget and were certainly not connected to wider business decision-making. At leading banks however, they are now evolving to become powerful champions of data strategy with wide purview and a seat at the top table.

The best, now often called Chief Data and Analytics Officers, are change agents, working closely with functions across the bank to make data less scary and more useful. They play a multi-faceted role as evangelists, teachers, sages and enforcers focused on ensuring the organisation gets the best value from its data. They lead teams of data scientists and ensure they are integrated and aligned with the business. A good CDAO should be the right arm to the CEO as they deliver a data strategy. Given the right responsibility and budget, they can quickly become a vital strategic partner for the business.

Core to the role is the experience and desire to use data to solve real business problems. Combining an overarching view of the data across the organisation, with a well-articulated data strategy, the CDAO is uniquely placed to balance specific needs for data against wider corporate goals. They should be laser-focused on extracting value from the bank’s data assets and ‘connecting-the-dots’ for others. By seeing and effectively communicating the links between different data and understanding how it can be combined to deliver business benefit, the CDAO does what no other role can do: bring the right data from across the business, plus the expertise of data scientists,  to bear on every opportunity.

Balance is critical. Leveraging their understanding of analytics and data quality, the CDAO can bring confidence to business leaders afraid to engage with data. They understand governance, and so can police which data can be used for innovation and which is business critical and ‘untouchable.’ They can deploy and manage data scientists to ensure they are focused on real business issues not pet analytics projects. Innovation-focused CDAOs will actively look for ways to generate returns on data assets, and to partner with commercial units to create new revenue from data insights.

The CDAOs are the catalysts that turn the theory of a data-driven bank into reality. Having set the vision, developed the data strategy and roadmap, the CEO should look to the CDAO to operationalise it. To be effective CDAOs need power and budgets, and this means executive sponsors at the highest levels. As the hinge-point between strategy and execution, and between board and business, a good CDAO will quickly become indispensable across functions and business units. Chief Financial Officers may be the most effective board sponsors for the CDAO since, as we’ll see in later blogs, they share an enterprise-wide view of assets. But chief marketing officers and chief risk officers will also come to rely on the CDAO as the data strategy is operationalised across the organisation. Making the right decisions now to set up CDAOs to succeed in the bank of the future, getting them onside, invested, empowered and incentivised as evangelists and facilitators of data driven innovation, will accelerate growth and effective defense against Big Tech encroachment.

Over the next few weeks we’ll look at how CDAO’s can help implement the data strategy to drive intelligent conversations for the CMO, identify cost savings for the CFO, and mitigate risks and avoid costs for the CRO.

 

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