How Can Your CFO Unlock the Power of Trapped Data?

Using data to drive efficiency, save costs and generate growth within a financial team has become an integral part in the role of today's CFO.

However, with more data available to businesses than ever before, finding the most valuable insights to achieve strong, data-driven growth is rarely quick or easy.

In this article, Trey Johnson, Chief Evangelist at ZAP, explores the challenges your CFO can face when harnessing a financial data. Trey looks at how using software automation can build a better ‘data culture’ within finance teams, and how it can drive growth, minimize risk and identify new opportunities.

“Don’t let your financial data cause staff burnout!”

“Don’t let your financial data cause staff burnout!” It’s a bold warning but, after a recent workshop with partners and customers, this was the headline of the resulting infographic that summed up our discussions. Everyone laid on the table the IT departments’ pain points in financial reporting and I gathered them into six key hurdles, which run as follows:

Hurdle 1 – The raw data…

It all starts with the data, of course, stored in ERP systems (such as Microsoft Dynamics), accounts and finance software (such as Sage) and – for almost every organisation, no matter what they might claim – a ton of Excel spreadsheets. For many IT teams delivering reports to a CFO, what should be a straightforward act of connecting to and accessing these systems is often a major challenge.

Hurdle 2 – Complexity and mismatches

There are so many layers of complexity in financial reporting to wrestle with. Not least currencies, countries, and differing terminology/semantics. In terms of mismatches, it’s fair to say that integrating, consolidating and understanding the relationships between and data and databases is a job in itself.

Hurdle 3 – Timings and adjustments

Deadlines, chase-ups and late submissions… According to Companies House in the UK, there’s been a 10% increase in late submissions of accounts in recent years, despite continued investment in ERP, accounts and finance systems. Fast reporting is clearly a struggle that’s on the increase and adjustments, reviews and redrafts remaining a lengthy, manual and labor-intensive task.

Hurdle 4 – Error correction

Detecting and correcting errors in financial reports is the next major hurdle and one which can also be quantified.  Looking at just the UK, 176,000 companies were fined last year for errors in their financial reporting (again, according to Companies House), with the total fines amounting to £89 million.

Hurdle 5 – Security

Above all of these hurdles, there’s the overarching work in security and data governance that is a vital part of every organisation. Compliance to GDPR and numerous financial and auditing standards – which, of course, vary from territory to territory – all need to be considered. Again, another manual task that has traditionally been very time-consuming.

Compliance to GDPR and numerous financial and auditing standards – which, of course, vary from territory to territory – all need to be considered.

Is there a fix for all of this? While there’s never going to be a magic wand solution, software automation of business-critical, time-consuming aspects of financial reporting are emerging which I think are well worth a discussion. They’re worth a discussion in the IT department, and they’re something the CFO (and the CIO and CEO) of an organisation should also be cognizant of.

How can software help?

The last few years have seen the arrival of software automation into the world of finance and data processing, designed to tackle all of the hurdles above. To my mind, there are four key ways that automating data management with software can relieve the ‘data headaches’ that surround financial reporting.

Firstly, being able to automate data integration is a major step forward. Software can consolidate all your data automatically, so nothing is missed. Systems such as a Microsoft ERP like Dynamics AX or Dynamics for Finance and Operations. As a result, tasks that might have taken your finance team weeks or months can be turned into quick, app-based clicks.

For reporting itself, the main output of the hurdles we’ve talked through, it’s possible to put software in place to that can deliver a central, consolidated ‘data hub’, from which efficient and accurate analysis can be pulled at any given time. Also data modeling, with software, can become a fast, intuitive – rather than manual, laborious – process. Certain variants of data management software will come with a UI that makes it easy to prepare complex financial data for reporting at user-/IT-level, without the need for technical experts.

Finally, security and governance. If all data management is automated, a very useful result is that you have then have an overarching system in place that will control, audit and log all activity. From password and access control to reconfiguring mismatched data.

What do the analysts think?

For a second opinion on all of this, I’d recommend the Helena Schwenk’s white papers, she’s a chief analyst at IDC. They’re good at looking at looking at both the underlying technology (in this case, ELT, extract, load and transform) and the bigger picture.

“ELT routines (in data management software) provide automated profiling and transformations for data sources,” Helena explains: “including the ability to identify and manage custom aspects of deployments, alongside prepackaged data warehouse models for specific business applications including Microsoft Dynamics, Sage, and Salesforce.”

On that data security/data governance angle, data management automation software can, IDC explains: “provide configurable administration and security capabilities – with additional support for extracting security from ERP systems – to help ensure access and compliance requirements are upheld.  In addition, auditing modules provide IT administrators with data on user activity, resources usage, and system monitoring to help fine-tune performance.”

As for my take on the bigger picture, with data management automation software, CFOs and IT teams get – at the basic level – faster reporting with no ‘data headaches’. They also become able to better manage their data, by removing the hindrances of accessing legacy systems, while still tapping into its legacy data. Their ability to navigate through periods of growth – and downturns – are less obstructed by data trapped in ‘silos’. Instead they’re have increased confidence in the financial intelligence readily available to them, regardless of whether it’s in the cloud, on-premise or a combination of both.

Utilising software automation solutions which improve the accessibility and manageability of data across the financial arm of a business enables CFOs to identify trends and issues before they make an impact (rather than after). It also improve processes and drives efficiencies. Fast reporting – and gaining insight quickly and easily – allows the CFO to stay ahead of the curve, by anticipating the next question before it is even asked.

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