Knowing “everything” may seem like a great idea, but knowing what’s important is what really matters.
A recent report by the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CMA), “Joining the Dots: Decision Making for a New Era” explored the changing roles of today’s senior business executives. It found that five major challenges existed:
- Overcoming the inertia of bureaucracy to become more agile in decision making
- Improving collaboration by breaking down silos
- Balancing short-, medium- and long-term objectives
- Turn big data into strategic insights
- Build the decision-making skills of key executives
The fourth bullet point is one I’ve touched on in past blogs, especially when discussing the value of that data within the finance structure of the enterprise. In order for huge volumes of data to hold any value, you need to be strategic in what you’re trying to get out of the data. Otherwise, big data could actually end up hurting you. Many companies are figuratively “drowning in data,”
According to the report, which is based on the responses of 300 C-suite executives at large organizations from around the globe, approximately one-third of those respondents feel that “big data has made things worse, not better for decision makers,” and 36% indicate that their enterprise is not coping with this enormous glut of data. An eye-opening 80% can point to at least one occasion over the past three years where a strategic decision was made, only to find out later that the decision was based on flawed information.
However, with that being said, no one can argue with the point that data is invaluable, as long as people know how to “slice and dice” it to get the real-time information needed to make strategic decisions. And with real-time information constantly available, when changes occur, companies are better able to make the appropriate pivots to respond to those changes quickly and with less disruption. With so many analytical tools and apps now available and more constantly entering the scene, companies now have the means to find the kernels of information they need without making huge additional expenditures in resources.
So how do you capitalize on data that may be siloed in different departments? First, you need to have the right person responsible for bringing it together, someone who has a deep understanding of the company’s goals and positions and understands what insights are required. That, in many organizations today, is the CFO. No one has to bring more disparate departments and functions together than the CFO.
Other necessary steps, according to the report are:
- Prioritize data and assess carefully how internal and external sources of information are used.
- Accelerate the dissemination of the information derived from that data throughout the organization.
- Identify technologies that can “foster the sharing of information.”
- Build forecasting ability
The bottom line: companies need to bring in all of the data available, but they need to have the available talent and leadership to know what they need from all that data and how to use it to contribute to company productivity and profitability.
Download the report.