Alex Vayner, Americas data science and artificial intelligence lead at PA Consulting, explains how CFOs and finance leaders can drive better data analytics and transformation projects.
The article notes that many organizations have spent millions on data analytics technologies but often achieved disappointing returns. This presents a major challenge for finance professionals as they often play a key role in data transformation projects with many CFOs sponsoring them and taking the lead.
One way finance leaders can improve their impact on data analytics is expanding their knowledge in the area. Most finance managers believe data analytics will be essential for business survival, but they lack the necessary knowledge that underpins it.
Alex said the reason many companies struggle in this space is that they continue to approach mining and managing data as the goal. Solving business pain points is often an afterthought once all the data is acquired, structured, and cleaned.
He adds: It is vital for CFOs to switch from a “bottom-up” view of managing data towards a “top-down” view of solving problems. This can help identify the critical data elements needed.
Alex offered the example of a CFO facing discrepancies in sales reporting from different divisions and regions. “Instead of declaring a need to create a separate ecosystem, which will take lots of money and time, they should instead ask to fix one division in one region,” Vayner said. “From that, they can learn about discrepancies in data quality, consistency, and accuracy that can then be generalized.”
The rewards are great for CFOs who get data transformation right. Alex said companies with advanced data capabilities can operate based on better insights, and numerous studies show that those companies outperform competitors. For example, they are twice as likely to be in the top quartile of financial performance in their industry if they have advanced data capabilities built in.
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