When Data-Driven Goes Wrong for CFOs
by Michael Burdick, on Dec 6, 2018
As a CFO in a mid market financial department, it’s hard to think your company could prioritize data too much.
Data is where you add value. Data is where you capture the key insights to drive the company forward.
Typically when you think of CFO frustration, it’s because there is too little emphasis on data and too much focus on the next shiny object or great idea.
Today, CFOs have at their fingertips more data than at any time in history. We have Business Intelligence tools, enterprise financial software and everything integrated so more and more data flows in and provides raw material with which CFOs can craft a story and projections.
So what’s the problem? Aren’t these all good things?
The problem is, as good as all that sounds, finance departments aren’t exactly getting a clear view of their data.
The key point to remember is - the value is not in the data. The value is in what we can extract from the data. The value is in decisions and adjustments that are made because of what is in the data.
A recent report by Adaptive Insights shared the obsession with data is turning CFOs into number crunchers instead of the decision-making leaders they should be.
According to their CFO Indicator Report CFOs are feeling more frustrated because they are drowning in data.
Here are some stats from the report:
17% is the estimated amount of time CFOs are spending on strategy
60% of CFOs list data integration as the top hurdle for gaining actionable reporting information.
The research is clear. While data is essential for growing a healthy company, CFOs are spending too much time collecting and gathering data, which is preventing them from being strategic and adding high level value.
How to Get the Most Value from Data
For your finance department to be as valuable as possible you need to have the data on hand, and use it to help the business grow.
Here are a few tips for CFOs to have a data-driven focus work for you, not against you.
- Prioritize speed
Gathering key insights is crucial for a business. But if those insights come at a huge delay, you may not be able to do anything with them. Use your analytical insight to determine the major dial-moving pieces of information and then go all in on collecting this information.
Speed is often more important than data, because speed allows you to add strategy and make decisions. When you are waiting and messing with numbers, you can’t add any value.
- Play to your strengths
If there is a breakdown in the systems that allow your finance department to collect information, you need to assess your team. Gathering data should not be a major function of the CFO.
You need to have a team that plays to its strengths wherever possible. Specific functions call for specific roles. Make sure you have the team necessary to crunch the numbers so you can perform at the highest level.
- Build a team of specialists
Many times the breakdown in systems and data comes down to issues of technology. Different technology tools are used together and supposed to sync over information, but it requires double-checking, spreadsheets and it can be overwhelming.
In your financial department, it’s not enough to have skilled accounting, bookkeeping professionals. You also need to have the right people with the right specialized skills and familiarity with the technology systems your company uses.
At Paro - we have on-demand talent that specialize in all financial roles and have specific technology and industry experience.
If data is moving slowly in your finance department, you can find an on demand professional to crunch the numbers so you can continue to play to your strengths.
Want to know more about how you can add more value as a CFO?