Published on the 03/10/2018 | Written by Heather Wright
Too much siloed data continuing to hold finance back...
Finance departments are failing to transform to deliver the rich insights required by today’s businesses, with the proliferation of data streams proving a key challenge according to a recent survey.
The Workday report, Finance Redefined, says while companies are looking for the strategic insights to drive decision making, many corporate finance functions are unable to deliver that insight due 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.
“Systems issues are the major barrier to improved risk management.”
“Many finance teams are still occupied with traditional, transactional tasks or spend most of their time gathering data rather than analysing it,” notes the report from the finance and HR vendor.
The report serves up four key areas for finance to ‘redefine’ – resilience, intelligence, leadership and talent – and flags the ongoing challenge for many organisations and departments of an overabundance of data, trapped in legacy systems and organisational silos, and the ability to effectively harness it.
“Few organisations can seamlessly access that data, combine it with external data sources and build the data models and predictive capability to transform their approaches,” the report says.
“When we look at medium-size enterprises, we find that systems issues are the major barrier to improved risk management.”
The report, based on a survey of more than 670 finance leaders including CFOs and finance directors globally, found only 39 percent of finance leaders were highly confident about managing risks. That comes at a time when market volatility, growing regulatory scrutiny and political risk and uncertainty, along with data privacy and cybersecurity risk and the pace of digital disruption – not to mention threats from bigtech players muscling in on the banking market – are keeping finance teams up at night.
Harnessing data and analysing it effectively opens the doors to new risk management abilities, such as using predictive analytics to assess which customers are more likely to pay invoices on time.
“Finance leasers need to ensure they have the systems and data management approaches that allow them to identify the right data, ensure it is of high quality and get it into the hands of people who need to make key risk-based decisions,” the report says, noting that having the skills to analyse data and build risk analysis models, and a culture that prioritises data driven risk analysis is also crucial.
“The time is now for finance leaders to focus on redefining their function across several key areas to continue driving business growth and lead in the increasingly digital economy,” says Betsy Bland, Workday vice president of financial management corporate strategy.
According to Bland, finance needs to invest in cultivating the right skills, bridging better connections to other leaders, and pushing the boundaries of technology to break down data silos and outpace the competition.
That means building resilience through having the right systems and data management practices in place and a culture that prioritises data-driven risk analysis; intelligence through use of advanced analytics with integrated finance and non-finance data; and leadership, with ‘seamless’ collaboration between finance leaders and c-suite peers, Workday says.
Talent is also a key area, the company says. It says the face of finance talent is ‘set to change radically’, with 74 percent of survey respondents saying finance roles will need to be redefined as a result of robotics and AI.
“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.”