Finance Transformation and the role for data

Spokesperson: Mike Nader, VP, Business Analytics Solutions, Incorta


Your business is continuous – so why isn’t your finance data?

Your finance function is essential to your business – it provides the data used to make management decisions, meet your goals and report on business incomes and revenues, profit and loss, and cash flow. However, traditional approaches to analytic data delivery for accounting processes and Financial Planning and Analytics (FP&A) are not able to keep up with the dynamic market demand. Creating a hardened data delivery process can take years to build and change. Regulations and market conditions demand action in days, weeks, and months. As companies spend money on digital transformation and services – IDC estimates this will reach $3.4trillion worldwide by 2026 – office of finance teams have to look at their processes and how well they use data.

The main aim for digital transformation is to make businesses run faster. Rather than waiting to respond to customer demand, companies want to use data to take action ahead of their competitors. Some of this might be automated, but humans will need to make the choices.

These choices will come down to financial impact and potential results – for example, should products be shipped to their original destination, or be diverted to a hot market that is at risk of selling out? Should you incentivise shoppers with special offers, and when are the right times to make them? Are these decisions at corporate level, or should you make data available to regional or store managers working with customers directly?

To implement these processes, you need the right data and the right approach in place. Having the data in the first instance is vital, but if you can’t make it available in a timely way then you will miss out on ways to make that difference. For finance departments and management teams alike, there is a huge opportunity for finance to capture value. This year, 9 out of 10 executives want finance to step up into that more strategic role, according to Ventana Research, but only 3 out of 10 companies will complete this by 2026.

Mike Nader,

What is holding finance back?

Finance teams want to deliver on this too. The 2023 CFO Agenda Report by Hackett Group found that 75 percent of finance teams have started to address changes thrown up by digital transformation. However, not being able to turn the data they have into actionable insights (57 percent) was listed as one of the primary reasons why they were having trouble making these initiatives work, second only to the issue of retaining those with the right skills and talent.

This problem around data has to be solved. Without the ability to work with data as fast as the rest of the business, finance will not be able to respond to those business requests. When the rest of the company is focused on continuous delivery and performance, the finance team is in danger of being left behind.

The problem is how much finance teams rely on manual processes to get data ready for their reporting needs. Rather than being simple to gather data and get it ready, many finance professionals have to spend their time with spreadsheets to get that information in a format that they can use, or to pass on to the next person in the financial data supply chain. The data finance teams work with is a lot more complex than the data for the rest of the business.

In some respects, this is a problem of using the same words when they have very different meanings. For IT, data is well-ordered and then optimised to go through automated data pipelines. For finance, data is gathered from multiple Enterprise Resource Planning (ERP) systems, business applications, finance tools and spreadsheets and then needs multiple enrichment or transformation steps applied that they have not been able to automate in the past. Rather than the structured data from modern applications, finance teams have to manually stitch that data together with spreadsheets acting as the lowest common denominator for that work.

IT may have promised to fix this problem in the past. But these projects very quickly run into those real-world problems around data preparation, delivery and accuracy, and then do not pay back on their promises. When this happens – indeed, when it happens multiple times – finance teams assume that IT can’t do anything for them. The reality is that data engineer (IT) teams need to apply rigour to the data process. Data is an asset, they are paid to treat it that way. What is needed is a reimagining of the processes that provide governance while enabling the real agility the business is demanding.

Implementing new processes around data

From a technology perspective, this involves getting data in the right way so that the finance team can run their reports and conduct analysis. Finance teams have to acquire, process, analyse and present that business applications data more efficiently, so that FP&A teams, accountants and CFOs can all get insights out.

Building up trust in this data involves looking at how it is delivered to the finance team and understanding where the results come from. Alongside involving the FP&A team in designing the process, showing where the data came from is essential for this. To achieve this, any new approach to data has to provide more detail to finance analysts, such as looking at specific sub-ledgers. This ability to audit where results come from and explore the data involved should help finance teams to understand how their reports are created and that the data is trustworthy.

Alongside trust, speed of that data is also important. Currently, when finance teams process data manually it can take hours or days to compile. Any approach today has to deliver that same quality of data in seconds. With this boost in speed, finance teams can deliver reports faster and keep up with the rest of the business. However, this boost to productivity should have an additional benefit – being able to run reports and investigate data quickly will mean that you can start to ask more questions and experiment more. Couple this with the ability to look into sub-ledgers and data sources directly, and you can see how finance can become that strategic partner that the business is after, optimising operations and improving decision making.

The future for data in the office of finance

FP&A, as an example, has been historically limited due to the time it took to compile data. Freeing up time through improving how quickly data can be acquired, processed and put to use makes the whole team more efficient. More importantly, it opens up more new opportunities for the finance team to work around data and create value.

Gartner has predicted that 80 percent of new headcount in finance will be for new roles rather than traditional FP&A positions. Building up skills around data will be essential to capitalise on the opportunities that exist, but at the same time, teams have to believe in their new approach. It takes time to build up trust in any new approach that gets implemented. But providing the right data to the right people at the right time has the potential to be transformational for businesses. For finance teams, this effort will be worth it for the opportunity that it creates to lead business operations, not just report on them.


About Mike Nader

Mike Nader is Vice President Business Analytics at Incorta, an end-to-end data analytics platform. He is a highly experienced solutions architect, consultant, and educator with more than 25 years’ experience working in the enterprise analytics and performance management space. Mike has worked in industry, multiple professional services firms, and in software product management and solutions engineering.


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