POWER #2 EXPLOSIVE INCREASE IN AVAILABLE DATA
With the explosion of data, Data Governance—including Data Security, Master Data, Data Quality and Analytics—is critical for CFOs to transform the finance function from a reporting entity to a department that leads strategy using business intelligence.
To turn this explosive increase into a long-term competitive advantage, CFOs must determine the role they and their finance department should play. In most cases, this means establishing and leading a corporate-wide Data Governance approach. And in other cases it can mean that Finance only provides the crucial input. The CFO plays an important role in generating added value by using Analytics to change the organization.
The organization as a whole:
- should view data as an integral part of the business strategy;
- should align Analytics deliverables with business requirements;
- must ensure the right leadership and the right culture.
CFOs should focus on:
- helping to recognize biases and assumptions that often lead to poor decision-making;
- providing user-friendly tools for data users;
- converting analytics-based insights into actions, incentives, rewards and measurements.
STRENGTH #3 MORE AND MORE MAJOR RISKS
Today, organizations and their CFOs are challenged by more and more pervasive risks including market volatility, hyper-connectivity, geopolitical crises, regulatory reforms, cyber threats, epidemics and pandemics. Just to name a few.
Finding sufficient certainty to make decisions in this volatile risk landscape is a major challenge for CFOs. The world we live in is much more connected. Risk events in one part of the world can affect the whole world. CFOs need to think more about how they monitor the future and what's happening — in their markets, in their industries and where they operate — so they can anticipate these events.
Robust strategic risk management requires effort and leadership. To play their role effectively, CFOs must:
- Think beyond avoidable risks: Identify strategic risks that other organizations may not have thought of, including those where the potential added value does not outweigh the potential negative consequences;
- Address risks immediately: Bring risks forward in strategic discussions and routinely evaluate the risk profile and its impact on business strategy;
- investing in talent: Take the time and resources to recruit talent with strategic and advanced analytical skills needed to improve the risk function.