How do you use data and analytics to gather meaningful insights and overcome financial turbulence? This is the question Sush Koka, Director of Global Product Marketing at Basware, asked two CFOs at the recent webinar hosted by Marcus Evans on cutting through the data noise.
In this insightful and engaging conversation with John Wise, CFO of Acumentis Group, and Jon Blackburn, CFO of the Sydney Opera House, it was clear that those who are using cloud-based technologies as part of their finance operations are definitely ahead of the pack and more able to find the right balance of information, as well as data accessibility. Indeed, both CFOs are using data and analytics to survive tough times and prepare for better ones to come.
Were their responses unique to the continent of Australia, however? I don’t believe they were. As the moderator of this interview, to me it was clear that CFOs across the world are facing similar challenges. Yes, the Sydney Opera House is facing some unique challenges right now, but the factors affecting live entertainment are also relevant to organizations like theirs all around the world. It’s more about the products and services you provide and what people need right now, rather than where you are operating geographically.
Data is critical for CFOs to make the right decisions
The use of data and sophisticated analytics models is deeply embedded in every CFO’s day-to-day tasks, from reliable risk calculation to forecasting financial performance. What came to light during the conversations with both John and Jon is that the pandemic has bestowed new importance to data analysis for critical decision making, bringing it to companies’ attention like never before. Both organizations are relying heavily on data in these challenging times to make day-to-day operational decisions as well as for longer-range strategic planning. Another insight gained was that there is a difference in the type of data required for CFOs to do their day jobs and the kind of information that leaders and other employees need for operations. Providing the right type and detail of information, depending on specific user needs, is the key to data that deliver insights and value.
Cloud based solutions can help streamline information
It’s not about how much data you have; if it’s not easily accessible and guiding you to make better decisions, it’s kind of pointless. However, when processes are automated and data is accessible in the cloud, it provides the opportunity to drill down to different levels and provide access to users based on their specific information needs. With a cloud based analytics system you can assign roles and permissions, customize analytics and views, determine how different users download information based on what they should have access to and what’s most relevant to them. This also avoids data overload, by consciously giving people the data they need to be more successful and efficient in their jobs.
But customizing data access brings with it another challenge: employees might be used to seeing certain information or reports that give them comfort and removing access to those reports or, indeed, not creating the reports at all could be a problem. John says, “You need to really think about what data you are using and the purpose of that data to ensure that the move from paper-based, manual processes to automation and the cloud is successful.”
So how do you make the most of the advanced visibility that cloud-based solutions can provide? John believes that whenever you’re implementing solutions you should really make an effort to leverage the functionality available off-the-shelf and minimize customizations. He also issues a word of caution when it comes to data and the cloud: “You have to simplify your processes and information needs before you do data migration to the cloud. You need to make sure you’re designing the data set that you’ll capture in these new systems to be the data you want to get out of the system at the end of the day.”
Enabling a remote workforce is critical in times like these
Many finance departments were unprepared for a remote working environment when COVID hit. For many employees, it was the first time they’ve been required to work from home. While both CFOs feel that some form of remote working will continue to be the new normal, even after we come out of the crisis, they acknowledged that those who had already embraced cloud-based solutions were ahead of the curve when lockdown made working from home mandatory.
John Wise said they moved to the cloud in 2019 and that has been a key driver to their ability to get data, visibility and analytics almost immediately. But the biggest benefit of moving to the cloud last year, was that when lockdown happened, the whole finance team was able to move to remote working within 2-3 days. John says, “We’d already moved to the cloud. All our PR systems, evaluation software and payroll work was on the cloud. We are communicating using Teams. We just had to flick a switch and we moved very seamlessly to working from home.”
But since finance teams typically sit across from each other, there has been a need to focus more intensely on how people could collaborate more effectively. “The biggest thing you learn is ‘training by osmosis’”, says John, who onboarded a new Financial Controller during lockdown. “By being next to team members you learn a lot. You lose some of that that when you’re working remotely and we have been consciously taking steps to increase communication and collaboration across the team.”
Keeping that aside, the systems did well, the ability to deliver the work was safe and Accumentis did not really see any significant impacts to operations and productivity, owing in large part to the availability of cloud-based access to systems and data.
Who owns the data you need?
Cloud-based solutions have another benefit and that is ensuring that gatekeepers aren’t preventing access to systems, according to Jon Blackburn of the Sydney Opera House. “With legacy systems,” he notes, “you only have a few key people who know how to get information out of the system. When you need something specific, you might have to find someone to come in, write a report and save it. You don’t necessarily get the real-time information you want. You have to do 80% of the work to get the info out, but you only have 20% of the time to analyze it”. However, when data flows smoothly, advanced decision-making is much easier. For example, Jon says, “We use data from previous seasons / similar shows to use data analytics to predict where that show will end up before it goes on”, demonstrating the value of data insights even in an industry more traditionally associated with creativity than accuracy: the arts.
Moving beyond data to analytics
Regardless of which context you operate in: arts or science, the key issue of data relevance remains, as both CFOs pointed out. “Having reams and reams of data in a spreadsheet is useless without the ability to convert that data into usable information”, says John who is realistic about how much information is helpful for people. “It’s easy for us as CFOs to understand spreadsheets, we’re happy with the detail, but some people’s eyes glaze over if you give them too much data. You need to give them concise, actual information”. Jonathan agrees that it’s important to provide access to the information that matters. “What matters to who?” he asks. “It’s about really identifying relevant KPIs, and keeping track of that. But keep it simple and report on it”.
In essence, it comes down to this: figure out how you are using the data, how it is impacting decisions, day-to-day operations and future strategic planning and then, based on that, figure out which reports you need and what data you need.
The data analytics drug
As John said, the volume of data is another challenge facing many companies. Too much information can overwhelm individuals. But when presented with the right insights that tell the story, decision-makers can understand what’s going on and where the problems are. That whets the appetite. Then they start wanting to get more of that information. Then, if you get the analytics and recommendations based on your data as you layer in artificial intelligence (AI) and machine learning (ML), you can really start to spot patterns, look at historic data and make recommendations. When this happens, more insight gets people more excited. They start to look to the data for recommendations and dig into details behind the data. Data insights then start to become addictive.
But data has to be connected to get the most out of it
The true power of data insight lies in its connectivity. What’s worse than making decisions without data is making decisions with incomplete / inaccurate data. If systems function in silos, critical data visibility is lost. Some platforms give you that visibility. When data is shared across processes, suppliers, spend and transactions instead of being locked in different functional siloes, beautiful things can happen. And when combined with AI and ML, the more of your data you access and the more you use intelligent predictions, the more the recommendations will be accurate.
So, will 2021 be the year of connected data?
The future is uncertain. We know we won’t go back to how things looked in 2019, but what 2021 will look like is anyone’s guess. Two things are clear, however:
1) 2020 massively accelerated digital transformation and cloud adoption and
2) anyone who has experienced life in the cloud is not likely to go back to the way things used to be.
So, if it’s simply too difficult for your organization to change, set up a trial group to see how they like working in a new way. Once they’re hooked on the data insights drug, the chances are that moving all your financial-related activities onto the cloud will be far simpler and the data visibility and insights that truly connected data can bring will flow from that.