Growing pressure on finance teams to find and analyze data raises questions of responsibilities and relevance.
The preeminent power of data within today’s multinational corporations means that business units—often under pressure to meet ambitious growth targets—are increasingly demanding that finance teams gather, read and analyze more data at faster speeds to help the business achieve its goals.
That dynamic, in some companies, is leading to finger-pointing and debate about which group is responsible for what. There are no easy answers that apply to all companies. What’s clear, though, is that improving the exchange of meaningful data is in the interest of both commercial and finance teams. That was among the takeaways from discussions at a recent Asia CFOs’ Peer Group meeting where members shared the varied views of their organizations.
Defining the debate. Some of the key questions surfacing at member companies in this era of big data include:
- What data should be used for business planning?
- Who should gather what data?
- Who should analyze what data?
- What is each team’s role in managing data and ensuring action is taken in response to the insights it produces?
Dividing lines. One member said that business units at his company are responsible for gathering and analyzing data that produces strategic insights, while finance teams use budgeting and financial reporting data to make forecasts. Another said that in her organization, monitoring the return on investment for sales is a finance team responsibility, while monitoring the return on investment for marketing is the purview of their business insight team.
Some participants said that number crunching involving business scenario planning and its impact on financial reporting is well within scope of the finance function, but data analysis on consumer behavior and its impact on business forecasting is outside scope of traditional finance activities.
For example, one member’s company is buying data from a telecommunication provider that shows the number of mobile phone subscribers who are from outside a given geographical area and how long they stay there. From this, the company hopes to observe patterns and trends to gauge tourist demand for hospitality services. The member said gathering the data and analyzing how it might be used to boost sales is the business unit’s job. But finance could then make use of that analysis for financial planning.
Wanted: data scientists. Many finance professionals fear becoming strategically irrelevant if they limit themselves to gathering and analyzing data based primarily on prior financial performance metrics. That’s one reason more finance departments want to hire data scientists with the technical skills and curiosity to plough through complex data and make actionable sense out of it. But not everyone needs a data scientist; it may be enough to foster a team culture that rewards anyone who delves into data to discover trends, patterns and anomalies that help the business grow and profit.
Data custodian? This term surfaced at the AsiaCFO meeting as a possible description for finance teams that oversee the stewardship of data, distill it to information that supports business decisions, promote sound financial management, allocate scarce resources among competing business opportunities, and aid in the implementation and monitoring of business strategies.
Whatever term you use, almost everyone agreed that the finance function is increasingly involved in a more inclusive business planning and forecasting process requiring broader visibility into corporate performance management to provide a clear view of where the company stands and where it is likely headed.