We live in an age of information and disruption; an age where the data we produce is growing at an exponential rate, and long-established industries are being reimagined and reconfigured all the time.

For CFOs, it’s more important than ever to keep your ‘finger on the pulse’ by examining trends in your business and the marketplace to make informed decisions, driving your competitive edge.

To me, the ‘data-driven advantage’ is about securing insights to manage that disruption – connecting the dots in data produced from myriad sources and applying it to a workable decision-making process. Once this is in place, CFOs – and the C-Suite in general – can take advantage by leveraging the information to improve business performance.

In a previous post, I talked about how critical it is for CFOs to become omnipresent, providing insights across all lines of the business including operations, marketing, and human resources.

The alternative could be a poorly-informed decision-making process.

It’s the CFO’s role to bring those business units together, get that data moving and to show how business units interact and impact on the end result.

This information is only valuable if you’re working in an integrated and connected manner – utilising internal data across operations, sales and human capital, as well as external data sources such as weather and social media sentiments. These are all key factors when adapting to changes in the market place.

So how is data introduced to decision making?

The key is to experiment with data to look for trends that we may otherwise miss. There is no ‘right’ way to analyse this information, but modern tools make it easier for finance to experiment with a range of scenarios and business models and, as machine learning technologies are incorporated, test new algorithms to assess risks before they’re are put into production.

A simple test you could run: If we increase the price of something by five percent and the demand goes down by ten percent, what is the effect on our bottom line?

Generally speaking, you’re identifying trends and looking for exceptions. When you identify a trend, you can start working on ways to exploit it. When you spot an exception, you can look for ways to account for its presence and figure out ways to remove it.

It’s about promoting a ‘test’ mentality in yourself, and then using machine power combined with human thinking to create something understandable and valuable from that mentality.

The best way to make it understandable of course is to make it visual. Don’t produce a 40-page document of text and expect people to engage with it. Create a clear narrative that others can understand and remember. Luckily, there are lots of different data visualisation tools to help you do this.

The first step is trust. You need to ensure your data is trustworthy and then you need to trust the data. This is a leap of faith for some people, but the data is there and it’s growing exponentially.

The rewards are potentially massive, but more importantly, there are real risks of standing still and getting passed by competitors. Not understanding the data that influences your business increases the risk that your organisation is consumed by market forces.

It’s actually a very simple idea. You’re looking to create smarter, more efficient, more cost-effective organisations. That is the role of the CFO. When you can do that, it can take you and your organisation on a journey to becoming – and staying – the market leader.

This is the second article in a series looking at the modern CFO.
The next in the series looks at the value of cloud in delivering business value.
The first article provides an overview of the challenges facing the modern CFO.

ABOUT WAYNE GOODALL//

Wayne Goodall is Oracle’s Senior Director of Cloud Applications Development in JAPAC, covering ERP & EPM products. In this role, he helps implement and empower large business transformations across the region.

Traditionally, the CFO was primarily an accounting role – responsible for oversight of financial data and reporting to the board. Increasingly, the role is morphing into a strategic role, one where the CFO is a business partner across the organisation, leveraging data, looking for new ways to get better performance insights, predicting where the market is going, and looking for opportunities to drive change.

Simply put, it’s the CFO’s job to find and measure ways to innovate wherever possible.

Take a look at mature businesses that have been around for 20 years or so. What do you notice? What I notice is change. Most conspicuously, companies have changed their products and their services, but more importantly, they’ve changed their mindset.

That traditional business model, where you say “We’ve got a great product, we’re a leader in the market, we’ll just keep earning our share”? That’s changed.

The simple fact is, a name and a brand can exist for a while, but if you don’t adapt and change, you lose out to your competitors. Someone will come along, cheaper, faster, more efficient, more agile and innovative and with better technology, and growth will evaporate into decline. And all of that is happening faster and further than ever before.

The CFO has had to adapt from the kind of thinking that says, “This is the report that says where we’re at and you can use this report to answer that question”. Now, the challenge is to come up with the questions themselves: “How do we analyse this data more effectively? How do we stimulate and measure innovation internally? How can we use market data to predict the future and how we’ll be placed within it?”

The CFO’s ability to create value is reliant not just on data but on the tools at their disposal. Tools change all the time of course, but the critical aspect is that as they do people are freed to focus not on the data, but on the business.

These changing tools are empowering CFO’s and that’s especially observable as the demographics for that role evolve. As more millennials move into the role, the role itself is changing.

Millennials more than any other generation of working age, have a singular trust in technology. They have greater insight into what’s happening with that technology. These ‘new blood’ CFOs are encouraging the uptake of smart new tools – machine learning, robotics and a host of other innovations – all with a quest to drive efficiency. Millennial CFOs are encouraging the move away from inefficient, human-centred processes that eat up both time and effort, and insisting that we spend time doing what we should: making decisions based on good information.

This is a mindset change, a new focus on insight and efficiency to drive the decision-making process.

We see this mind-shift in our customers too. When people adopt services, their mindset begins to change as well. They begin to realise, “I’m not managing a system, I’m using a system to manage my business”. That’s a profound realisation for a lot of people, but many millennials understand it instinctively. They trust technology more than their predecessors, and it’s often this generation that is urging people to really think about how innovation can drive their businesses forward. The rewards can be enormous, but it starts with a mindset.

Inside the Oracle organisation, everybody – from day one onward – understands the fact that change is inevitable and if you don’t change, you don’t last very long. You have to be part of the change cycle, the innovation cycle, and part of the feedback process. We’re all stakeholders and if we see the opportunity for efficiency gains then we quickly deploy the right tools to make those efficiency changes happen.

That goes for me too. My role is to look at the market, look at the customer base and say to development: “These are the things that we could actually benefit from, here’s what the industry is saying, and here’s what the customer base is saying. We need to put these features into the release cycle for our applications”.

Things like AI, machine learning, this stuff is real now and it’s still evolving, because the wave is endless with innovation. Every day it becomes less about managing software, and more about using it to do our jobs more efficiently and effectively.

And the great thing is that the tools just keep getting better and better.

This is the first article in a series looking at the modern CFO.
The second article is The data-driven advantage for CFOs
The third article is  The Modern CFO: Using the cloud to deliver true business value

ABOUT WAYNE GOODALL//

Wayne Goodall is Oracle’s Senior Director of Cloud Applications Development in JAPAC, covering ERP & EPM products. In this role, he helps implement and empower large business transformations across the region.