How to Unlock Strategic Decision-Making with Data
We live in a marvelous time for data. Companies have more information about themselves and their markets than previous generations would ever have imagined.
You can have that data how you want it, when you need it, and place the finance function as the strategic engine of the business.
But too many companies just aren’t there yet. They either have incomplete, inaccurate, or inaccessible data. All of which means they’re missing out.
It’s one thing to say you want a data-driven business, and another thing altogether to put data at the heart of strategy. In this article, I’ll explain the difference, show you how our strategic finance systems work, and give you some keys to doing the same.
Why data access & accuracy are so important
Company strategy is always informed by the current state of the business. What do we know about our position today? If company data is readily available, it can be used to put together the appropriate strategy.
In the past, conversations around strategy placed a huge emphasis on the people making decisions. You prioritized people with experience and insights, and they had the biggest impact on your strategy. But now that companies have a way to gather data more easily, the strategy doesn’t only rely on the executives’ vision and experience.
Some of this will often depend on your company stage. All companies have data - to differing degrees - and all companies balance data with intuition to some extent. But early stage companies will naturally rely more on intuition until they have better data collection and analysis processes.
Ultimately, the quality of your strategic planning depends on:
Having accurate data
Having access to that data when you need it
Neither is particularly useful without the other. If you have quick access but you’re not sure the data is reliable, you can’t really use it. Likewise if you can’t access it, you can’t use it.
The clear benefits of better data
In the finance team, we need and use data every day. So the investment in improving our data systems pays off with every task.
As an FP&A and strategic finance person, the difference between having data and not is night and day. And the most immediate benefit is how much more dynamic my work can be.
Analysis starts with data. And if you spend half your time verifying data and putting together the model, that inhibits your ability to analyze efficiently.
I don’t spend time on Slack or email asking people where information is or whether the numbers are accurate. That’s typically a huge time sink for FP&A teams, and now it’s off my to-do list.
When you have requests from senior leadership for analysis or new viewpoints on a model, you need to move quickly. If they can’t make decisions when they need to, the whole company suffers. Enabling business users with self-service access to trusted data is a must-have for organizations to become data-driven.
Smart strategic decision making
If you have good data when you need it, there’s less second guessing. When I send analysis to senior leaders, I and they know that the data is trustworthy and their decisions are built on solid ground.
The alternative is perhaps only being 50% confident in the data, either because you know that manual work leads to mistakes, or because you simply don’t have all the information. In some cases 50% accuracy is enough to provide directional conclusions, and in others not.
So it just makes life easier for leaders. They can easily combine their insight and experience with rock-solid analysis.
Real-time, consistent data
The positive effects flow beyond the finance and senior leadership teams. The whole company gains efficiency.
Everyone with access to the data can have reliable dashboards and can easily monitor their KPIs. For example, we work closely with our HR and Talent Acquisition teams on their hiring plans. Today, the data warehouse lets them easily share reports with their stakeholders, so we don’t need to be in the middle.
And we save the time you would otherwise spend in meetings presenting that same information. They can do it themselves now.
Centralized data also removes the grapevine effect: “I heard this from X, and now you’re telling me something different.” Everyone can consume data in real time, when they need it, and there’s no need for all the teams to spend time updating their reports.
These manual moments are when information gets distorted, through human error or misunderstanding. So we just remove these problematic moments.
How to make strategic data use more effective
Finance teams know the value of data - the previous section won’t have been surprising. But there’s a difference between knowing its value and being able to use it effectively.
Most companies exist in a state where you have some good data you can rely on, and lots more that’s either messy or missing. In my experience, there are a few key areas for improvement.
First, everyone needs to understand the value of information. Are the people using the data fully aware of what they can do with these systems? Do they even know where all the data is? Every stakeholder should understand the data and share a common definition of the information.
At a more basic level, all staff must realize the cost of having to correct or update data. And it’s not complex. We put together slides clearly showing the pain points we had and what we would gain by improving our systems.
We had all the stakeholders in one room, so everyone had a chance to react and communicate issues if they had them. And once the key stakeholders were on board, we made sure the message and benefits reached the rest of the company.
You likely have a data team which is seen as the keepers of information. But all team members need data, and all are stewards.
We’re all responsible for identifying inaccurate data and correcting it. And people need to take this responsibility seriously, including all stakeholders.
Clearly this relates back to education, but also the company culture. At Talend, data is part of our products and our culture. It’s what we think and talk about every day. So I can see every day the positive effects that come when people truly care about data quality.
But you need to run a data platform to instill this in your own organization. It’s part of encouraging operational excellence and professionalism.
Real-time data is the goal. And the biggest obstacle to this is having disparate systems and data silos. Our FP&A team (including me) used to work closely with Accounting to get actuals for our month-end close. We needed the financial transactions pushed in our financial planning system before we could do our analysis.
This process was always very manual, which made it time consuming, and prone to error. And whenever a person left the company, a small piece of the process would leave with them.
So we worked with our IT team to integrate our two systems - Netsuite and Anaplan. Today there’s no latency between Accounting and the rest of Finance. Once the actuals are booked, we can all use the data however we want.
Of course, integrating systems is a challenge. ’ve worked on a number of integration projects over the past few years. There’s a real “feel good” factor when you’re able to transform the way data flows and is shared across the company.
It’s also empowering for the teams involved. We can use automation to have sanity checks in place rather than personal judgment.
Partnering and securing buy-in
Change is difficult for everyone - even for the teams who had the original initiative. It’s a heavy lift. So naturally, a significant integration project or a change to certain teams’ systems can be a hard message to deliver.
But again, it’s about communication and making sure everyone understands the value of the project. If they don’t, go deeper into it with them. Let them make suggestions to really define the project.
This is really the key to data transformation. It always involves a range of stakeholders, and it will always require real work from each of them. Once we all agree on the pain points and the value of removing them, bandwidth and workload are simply challenges to overcome. Which might mean outsourcing much of the work or finding other resources within the company.
And it’s okay not to fix every pain point at once. Choose your top priorities and try to solve them as early as possible. The longer you wait and the more the company develops - the more data systems you have - the harder it will be to integrate everything down the line.
The ability to get access and leverage trusted data enables the organizations to accelerate the decision-making process.
If you don’t have the data access and accuracy you need to achieve this today, you need to change that. For me, there are three key principles:
Start early. In fact, ideally you’d integrate systems and get data flowing before you have mountains of information and complex systems to deal with. But even if you’re years past that point, it won’t get easier through waiting. And you’re missing out on benefits every day until you upgrade.
Get buy in. First from senior leadership who need the data, then your IT department to build a plan. And then bring in the key stakeholders to gather their feedback and make sure they’re heard.
Make data a company value. This is so central to our success at Talend, and I feel it should be the same everywhere. Every employee is empowered to use data, but also a steward to ensure that data is accurate and flowing freely.
We should all strive to build and lead great companies, and not be stuck with inadequate systems. CFOs and finance leaders are in a position to unlock the full potential of business data. I hope you will.
As a Strategic Finance Analyst, I support the senior leadership team with their strategic plans for the next three-to-five years. I also support our M&A strategy and I’m responsible for revenue reporting. Before this, I supported the CTO with their budget plan and resource management as part of the FP&A team.
Talend, a global leader in data integration and data management, is taking the work out of working with data.
Talend offers the only end-to-end platform that works across any cloud, hybrid or multi-cloud environment and combines enterprise-grade data integration, management, and governance capabilities. With Talend’s low-code and self-service modules, data experts and business users can actively collaborate to make data more discoverable, usable, and valuable organization-wide. Over 7,250 customers around the world rely on Talend for turning raw data into business outcomes. Top analyst firms and industry media recognize Talend as a data leader.
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