Using Data to Drive Business Integration
What exactly does “modernize” mean anyway?
The term has taken on many meanings in the open market. To an IT department, modernization involves developing an effective security infrastructure in tandem with hybrid-cloud solutions. To marketers, modernization means replicating real-world empathy in a digital environment. But what does “modernization” mean for finance functions? Should you bring predictive modeling into your organization? Should you be adopting new technologies to satisfy global Know Your Customers (KYC) requirements? At what layers of your finance organization should you focus? Fixate on figuring out the “right” way to modernize your operations for too long, and you’ll risk getting lost in option-overload of technical and data-driven solutions. It’s a maze of questions.
The simplest way to find the straightest path from your vision A and your outcome--goal B, is to look at your entire organization from an outside-in perspective, emerging from the needs of the market. Thanks to the evolution of digital, finance leaders have a new ability to drive revenue within their organizations. Real-time data, third-party information providers, and the fintech innovation world give finance departments new areas of leadership.
But modernization doesn’t mean adopting expensive systems, working extra hours to do a job on top of your job, or taking team members away from their core jobs. It doesn’t mean taking risks to run “more like a startup,” either.
It means making small adjustments to the way you make decisions, in-the-moment. Here are three ways CFOs and other finance leaders can contribute to their company’s data strategy:
1. Think beyond Customer Experience to Customer Obsession
In Q1 2017, Dun and Bradstreet commissioned Forrester Consulting to evaluate how enterprises are leveraging data and analytics to drive decisions and strategy. One of the focal points in the study is that customer obsession necessitates having a holistic, organization-wide strategy. This process means mastering the concept of “data driven” in 7 key areas:
- Business alignment. Ensure that multiple arms within the organization have access to cross-functional information, to make more informed decisions.
- Metrics and measurement. Quantify and capture outcomes that help people within your company make informed decisions, with confidence.
- Data insight and delivery. Create a system in which information flows tell the right story about your business, at the right time.
- Data management technology. Choose software and data-as-a-service (DaaS) partners that can help you build upon your vision.
- Data management leadership. Collaborate with team leaders on the implementation, management, and future strategy. Innovation in the open market happens quickly, and within every organization, all roads lead back to finance as a beating heart.
- Data governance. Create a strategy to ensure the integrity of the information that you’re sourcing and sharing, and make sure that that your data answers the questions that your organization set out to ask.
- Data management process. Ensure that you have the systems in place to keep your data current and accurate. Data is a tool that brings accountability to organizations, as well as the individuals and teams within them.
Expect your company’s transition from being customer focused to customer-obsessed to take some time. This is not a change that will happen overnight, as team leaders may need to reimagine and re-architect their organizations’ information flows. Focus on the lowest-hanging areas of opportunity for your business, but have a long-term plan in place.
2. Build a Data-Driven Operating Model
Your operating model is your long-term plan. It is a written document, authored by a number of stakeholders, for the purpose of uniting data R&D. Data silos and fragmentation are major challenges within organizations. It’s far too easy for people to sit at their computers and become engulfed in building new models and researching new tools. But what if a team member builds a system that does not integrate well with the rest of your organization’s technology stack?
It’s the finance leader’s responsibility to ensure that all efforts remain aligned. You don’t need to be a data expert. Rather, you provide strategic facilitation. You have an understanding of how operations tie back to your business’s financial health—and bottom line. The components of a data-driven operating model include the following:
- Executive engagement. Finance leaders need to drive collaboration in the strategic planning phases of a data management strategy.
- Strategic contribution. Those with the clearest view of a business’s financial health need to drive collaboration and source input from teams
- Data strategy. Data fulfills a purpose in boosting a company’s bottom line. Finance leaders will need to ensure safe transitions between systems, to ensure that teams don’t lose sight of bottom-line results when they pursue top-line gains.
- Data sourcing. Harvesting data from trusted sources, such as private, partner, proprietary, and public data, is central to moving from customer-obsessed strategies that are based on perception to those that are based on fact. Finance leaders will have the attention to detail that’s necessary for vetting potential data products and partners
- Data and analytic capabilities. Finance leaders need to get teams on board with predictive models
“Can we trust this process?” At the end of the day, finance leaders will be the stakeholders who answer this question.
2017 Study,"The Customer Obsessed Finance Leader in the Age of Data" commissioned by Dun & Bradstreet to Forrester Consulting
3. Pay Attention to Macroeconomic Risk Indicators
Now more than ever, finance leaders need to be geopolitically aware. Economies are intertwined in a historically unprecedented way.
One economic source to consult is Dun and Bradstreet’s quarterly Global Risk Matrix. This report provides a country-level assessment of risk. Some key trends that D&B’s executive economists have found include:
- The deterioration of global business operating environments
- New risks including U.S. Congressional politics impeding pro-growth economic policies
- Parliamentary elections in Austria ending in anti-EU parties in government, triggering further pressure on the EU
- A spate of terrorist attacks in Russia and Asia
- U.S. tax reform falling short of expectations and slowing economic growth
- Slow U.S. productivity growth containing growth potential
In developing data-driven cultures, finance leaders need to be hyper-aware of what’s happening in the world. Adaptability will be crucial for organizations that need to be fast-moving. The world is changing. Businesses need to be ready. Being customer-obsessed is synonymous with survivability.