To begin the process of creating a culture where data insights are prized, finance leaders first need to build alignment with their peers—and within their teams—on the importance of an analytics-driven culture. Our research shows that different groups have very different views on the significance of “an organizational culture that is focused on intuition rather than data-based decision-making”:
- Those we call our “next-generation finance leaders”—who are between 30 and 39 years of age, and who have significant business experience outside of finance—cited this issue as the top obstacle to making more use of advanced analytics.
- However, those we call our “traditionalists”—who are 50 years old or over, and who have spent the majority of their careers in the finance function—consider this the least significant barrier of all.
Once there is alignment on this issue, CFOs need to plot the transition to a culture where data informs and enriches strategic decision-making. This is not just about having the right data and tools available, or about getting the relevant insights to the right people for them to consume.
While these factors are central to the successful use of advanced analytics, it’s also important for individuals to know how to use available data and insights. This may involve shifting the balance of the finance role to include more time spent on business partnering. It also means addressing the behavior of individuals, ensuring that people reach for analytics when making decisions and are encouraged to do so. The EY point-of-view mentioned earlier notes the importance of aligning incentives and rewards with the “actions suggested by the analytics-based insights.”
Strong leadership is also critical, as the article notes. Senior leaders can take a number of steps, from delegating an influential executive to leading the enterprise-wide analytics program to using analytics to challenge existing mental models in the leadership team. Given this focus on the people dimension of data analytics, having the right talent in place is, therefore, an important part of the puzzle. This is a challenging area where finance leaders will need to be innovative and proactive. In our research, 71 percent of CFOs said they face tough competition in recruiting the best data analytics and digital talent.
Many organizations looking to exploit data analytics are focusing their efforts on building capabilities and investing in the right tools. While this is important, if finance leaders ignore the culture and people dimension, they could find that their investments do not deliver the returns they wanted.
For the full research findings behind the “Finance Redefined” global study, read the report here.