(This is the second part of a two-part blog series that starts here. In part two, we look at two other areas that are critical to advancing analytics in the finance function: strategic business partnership and leadership.)
It’s not enough to have data—finance teams must know how to use it to deliver relevant insights and guidance across the business. As technology continues to augment traditional tasks, finance teams will continue to shift more into a business partner role, requiring new skills and ways of working. According to Deloitte’s “Finance 2025” report, “Accountants using spreadsheets will be replaced by technology that does 90 percent of the work without human intervention.” This will enable finance to focus more on higher-value work, which “requires cross functional collaboration among business people, technology teams, and finance strategists.”
Historically, finance has faced challenges in delivering the value they want to business partners. Different areas of the business often work in silos, and finance doesn’t have the capabilities or structure to bridge the gaps. Finance teams tend to spend more time on data gathering and reconciling numbers with partners versus strategy and planning.
Robynne Sisco, co-president and CFO at Workday, describes the issues she has experienced in past organizations. “When it comes to business partnership, what often happens is that finance, HR, and other managers come together in a room, each with different data, such as varying headcount numbers. People spend most of the time debating what numbers are right versus talking about what the numbers really mean,” she says. The key is trust in the data, she explains. “Having the same data changes the conversation and the trust you have in the decisions you make.”
There are several ways that finance teams can lay the groundwork for effective business partnership:
Treat business partners like customers. According to the Harvard Business Review Analytic Services white paper sponsored by KPMG, “Advanced Analytics and the CFO,” this mentality is central no matter which business partnership model you use. “While there is no one-size-fits-all business partnering model, there is one element that all hold in common: a customer-centric approach to internal customers that helps drive real value for the business and boosts the bottom line.”
Managers need easy access and absolute trust in the data.
Develop analytical skill sets within finance—which may include hiring new talent. According to the Harvard Business Review white paper, “As useful and necessary as it may be to boost the analytical know-how of current staff, it is also clear that acquiring and fostering analytical talent must continue to be a top enterprise objective.” The report also describes a broad range of skills needed to support analytics in finance. “Demand for talent certainly includes those specializing in analytics tools, methods, and technology, but it will also extend to those with the critical thinking skills to ask insightful questions, interpret data, and draw sound conclusions.”
Matt Schwenderman, principal at Deloitte Consulting LLP, also emphasizes the need for analytical skills, including data scientists. “For finance specifically, one of the biggest gaps is really the difference between the doer roles and the insight roles. Many organizations have folks in all of those functions, but at a disproportionate volume to the doer roles,” he says. “We’re seeing clients, controllers, and CFOs start to look for and actually bring data scientists into their organization.”
Provide self-service analytics to the organization. According to the “Finance Redefined: Workday Global Finance Leader Survey,” only one quarter of finance teams are broadly making self-service data available to business leaders, a missed opportunity for CFOs to add significant value to the organization. Giving business partners direct access to relevant data and analytics empowers them to access the information they need to make decisions and better understand how those choices impact performance.
To effectively deliver self-service analytics to business leaders, two things are important: managers need easy access and absolute trust in the data. Cloud-based finance systems have made this possible: data is real-time, accessible from anywhere at any time, and there’s a single source of truth.
It’s also important to ensure that data governance and security controls are in place when financial data become democratized across an organization. Analyses are most useful when they are tailored, such as providing store managers with dashboards populated only for their specific stores or regions.
Sisco describes how her finance team is supporting managers with real-time data and analytics. “Our finance team has created dashboards in the system that are accessible by leaders. At any time, managers can look at their organization and see budget versus forecast versus actuals for headcount and spend and make in-the-moment decisions that will drive the results within the current period.”
As demand grows for greater analytics, many CFOs are asking themselves, what is the vision and path for my organization? This extends not only to finance, but enterprise wide. In the article, “How Analytics can Help Transform CFOs from Accountants to Strategists,” Chris Mazzei, global chief analytics officer at EY states that, “There’s no doubt that CFOs need to be a champion and driver for the use of analytics in all current core financial processes under his or her remit today,” he says. “But you can start to extend out from that. Financial data, as well as other data, is a key input to many other business decision processes, whether it’s procurement, supply chain, operational-type decisions or risk management-type decisions.”
What should CFOs consider as they develop their analytics vision?
Begin with the greater business challenges in mind. According to Deloitte’s “Finance Analytics: The Three Minute Guide,” start by identifying the critical business problems that needs to be solved, and then work backwards to see how finance analytics can help. “This may reveal problems you don’t even know you have—as well as potential new sources of valuable information that aren’t currently being tapped.”
Focus in on the most important KPIs for your organization, which will help drive better results than analyzing loads of data. “You can run models and analysis on any set of information and many organizations will do it at nauseum,” says Schwenderman. “There’s only a few set of key performance indicators which really drive performance of any organization. Create a good way to get at that data and use current technologies to be more predictive—learning off of that will drive greater results than trying to produce large masses of data that ends up sitting on a shelf.”
Partner with the CIO to evaluate technology investments that can address the barriers to your analytics goals.
Involve business leaders in the analytics vision from the beginning. This helps set up finance up for success. According to the Harvard Business Review Analytic Services white paper sponsored by KPMG, “Advanced Analytics and the CFO,” sponsorship at the leadership level is critical, and business leaders should be involved in prioritizing where to focus advanced analytics. The report states that “It is not good enough to put charts and tables in front of your leaders at the end of an effort. Rather, they need to provide input into the effort, own it, and go along for the journey. Having leadership’s commitment puts the CFO in a better position to get actionable conclusions.”
One way to lead these conversations is to explore with business leaders what data they need to support their decision making. Talk about specific KPIs they’d want on a self-service basis or the types of predictions they need to make. Engaging business leaders in the analytics discussion also makes it easier for finance to access data being held in other systems across the organization.
Assess if you have the technology to support your goals. Partner with the CIO to evaluate technology investments that can address the barriers to your analytics goals—such as improving data quality and access to data—and will support the ability to advance analytics in the future. According to the Harvard Business Review report, “Once business leaders have established the strategic analytics vision for the company, finance is in a strong position to not only evaluate business cases for investment in data infrastructure, baseline automation, and analytics systems, but also to recognize and initiate strategic infrastructure investments.”
Schwenderman offers some advice for taking a first step to advancing analytics: “Pilot capabilities around some analytics and predictive modeling. Plan, pilot, and fail fast—get out there, start doing it, see the results and have a feedback loop.”
Each area described in this blog series—technology foundation, business partnership, and leadership—are necessary for CFOs to be able to move their organizations forward on the analytics journey. Schwenderman emphasizes that the capabilities are already here to support the evolving role of finance.
“What we’re seeing is the ability of technology—the cost to implement and maintain and keep those technologies current—makes what I call the ‘no excuses time’ for finance,” he says. “You can’t tell me it takes too long or that that you can’t bring in that information and manage it and govern it, because those capabilities are here. The only thing holding finance back is embracing that role and setting up its organizational agenda and talent.”
The data opportunity for finance is here. Take the right steps to ensure you are prepared to make the most of it.