Big data is all the rage, right? Perhaps, but many finance executives in healthcare and other industries are on the verge of drowning in it and that means having to redefine their role to include resilience, intelligence, leadership, and talent -- all in order to become more analytical and innovative.
That's the bottom-line of a new survey from Workday. The findings indicate that many corporate finance functions are unable to deliver this insight, due largely to difficulty integrating finance and non-finance data, lack of relevant skills within finance teams, and ineffective collaboration among C-suite peers on data-driven decision making.
"Once considered a numbers-only role, the CFO must now balance traditional responsibilities with growing demand for data-driven analysis and insights to help manage risks, spot new opportunities, and weather economic shocks and volatility," Workday Staff Writer Christy Sasser explained in a blog. "The ability of finance to deliver quality insights quickly and to the right people creates great strategic advantages for an organization."
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The findings centered on four main categories: resilience, intelligence, leadership and talent.
First let's examine resilience. Growing regulatory scrutiny and rapid technological change top finance leaders' list of risks, with only 39 percent of finance leaders highly confident about managing risks. The study also shows that lack of meaningful data and systems-related issues are major barriers to improving risk management. In order to create more resilient finance functions, leaders must not only ensure they have the right systems and data management practices in place, but also a culture that prioritizes data-driven risk analysis.
When it comes to intelligence, in a data-driven economy, advanced analytics is critical to the finance function's ability to inform decision making. But the survey found only 35 percent of corporate finance teams are making extensive use of advanced analytics in key finance areas such as planning, budgeting and forecasting. The top challenge to doing more is integrating finance and non-finance data, which, because of system inefficiencies, requires teams to spend significant time aggregating and reconciling data. The research also shows that younger finance executives, ages 39 and below, say a culture focused on intuition -- rather than data-driven decision making -- is a top barrier to their organization's analytics ambitions.
To move forward with data intelligence, finance leaders need to ensure their team plays a key stewardship role in managing enterprise data. This involves working closely with IT to transform systems by unlocking data that is confined to organizational silos and legacy systems.
In terms of leadership, while it's understood that collaboration is necessary, only about one-third of finance leaders enjoy seamless collaboration with key C-suite peers, including chief information officers and chief human resource officers. In fact, according to the survey, 74 percent of survey respondents say chief financial officers and CIOs need strong working relationships. Yet 68 percent say CIO-CFO collaboration is limited because the executives don't speak the same language -- meaning terminology, jargon and understanding priorities. To improve collaboration, CFOs need to put structures and processes in place, as well as shift attitudes to bring in C-suite peers early on into programs and projects.
The face of finance talent, meanwhile, is set to change radically, with 74 percent of survey respondents saying that finance roles will need to be redefined as a result of robotics and artificial intelligence. The survey also shows that a top barrier to driving finance transformation is a lack of relevant skills, with forward-looking finance leaders looking to expand their talent horizons beyond traditional finance roles to include data scientists and statisticians. To better prepare for tomorrow's finance talent needs, CFOs must partner with CHROs to better understand what skills will be required in the long term.