From Scorekeeper to Futurist
Ash Noah, vice president and managing director of learning, education, and development at AICPA-CIMA, shared the Finance Assessment Model for Effectiveness (FAME) concept and how CFOs and their finance function can be categorized into one of five roles within their organizations: scorekeeper, advisor, partner, value creator, and futurist.
“There needs to be a finance data model that is the single source of truth, and that’s how we measure the effectiveness of data,” he said. “Connecting financial and nonfinancial data in order to measure intangibles is absolutely essential when we look at data. They’re not financial measures for intangible asset management, but there are proxy data points that finance needs to leverage.
“Finance must own a finance data model that is the single source of truth and that is a key measure of effectiveness of finance as value creator and futurist,” he said. “As there are no financial measures to manage intangible assets, it is absolutely essential to connect nonfinancial proxy data to financial data.”
The finance function needs those types of capabilities to enable the organization to make data-driven decisions faster, Noah added.
Finding Value in Nontraditional Data
Moyer cited the case study of Team Car Care, a large Jiffy Lube franchise operator and Workday customer that uses nontraditional data—such as weather reports—to project revenues and profits at each of its stores. “They have found out through the years that when there’s bad weather, people don’t change the oil in their car,” he said. “They can then predict the amount of staffing they need to have, the amount of inventory they need, down to the store level on an hourly basis. This gets right at the heart of value creation.”
House emphasized the importance of being thoughtful around the data structure and level of granularity needed, hinting at the breadth of sources Aon has incorporated.
“On the external data sources, we’ve identified some through academic research and some through our own analysis that there are a number of macro data points that we can use to help us understand where certain businesses are going in certain geographies,” he said. We’ll use data from Moody’s Analytics or other third-party forecasting firms, and we also use a McKinsey database to help understand where insurance premiums are going, where economic growth is going, and that helps us think about how we invest and stay out in front of demand.”