Finance professionals are evolving from scorekeepers to business partners and value integrators. Increasingly they become involved in decision-making at all levels in organisations. Considering the growing competitiveness and complexity of the business environment, business owners need in-depth and actionable insights delivered continuously to formulate their strategies and manage their operations. To deliver these insights in an integral and timely fashion, finance professionals have to strengthen their big data & analytics capability and embrace a forward-looking mindset.
Our research, however, shows that while finance professionals think that their current finance function is well-suited to play a leading role in big data & analytics, they also have limited practical experience with it.
The changing role of finance professionals
Finance professionals have traditionally been data-driven and are well positioned to play a key role in the field of big data & analytics. However, to truly deliver value-enhancing, actionable insights they have to bridge the gap between strategic and operational decision-making. This changes our perspective of the role of the finance function.
It is about the difference between “managing the business” (the more strategic analysis and decision-making) and “running the business” (the day-to-day operational decision-making in which finance does not traditionally play an important role). Given their discipline of quantitative performance management, and by expanding their scope of influence throughout the organisation, finance teams can significantly contribute to data-driven decision-making at all levels in the organisation.
It does not, however, mean that finance professionals have to become data scientists: on the contrary. Data science & advanced analytics is a different profession for which deep technical and mathematical competences are required. The finance function, as the primary decision-supporting function in many organisations, can however add value by combining their knowledge of both finance and “the business” to support formulating big data & analytics initiatives and converting analytical insights into valuable commercial and financial impact.
How finance professionals consider their involvement in big data & analytics
Through our latest research study on Big data & analytics and the Finance Function we have gathered insights on how familiar finance professionals are with big data & analytics, to what extent they think their current finance function is well-suited to play a leading role in big data & analytics and what factors they perceive as key challenges.
The survey results show that 71 percent of the respondents indicate that they have, at best, limited practical experience with big data & analytics. 27 percent indicate that they are regularly involved in big data & analytics and only 2 percent stated that they play a leading role in this field.
Despite these results, indicating relatively limited actual involvement, just over half of the res
pondents (54 percent) believe their current finance function is well-suited to play a leading role in big data & analytics.
In terms of key factors why finance professionals think that they are not sufficiently able to lead big data & analytics initiatives, they indicate that they especially lack the required skills and/or knowledge; both in the technical domain and the analysis/statistical area. The survey results also indicate that a substantial part of the respondents believe that the finance function is primarily used to provide backward-looking management information.
Further survey results reveal that these factors are also regarded as the top three key challenges for the finance function in strengthening its big data & analytics capability. Hence, to be better able to lead big data & analytics initiatives, finance professionals have to improve in the fields which are considered the most challenging to them.
Big data & analytics recommendations for finance professionals
In order to increase their relevance and involvement in big data & analytics, (business-focused) finance professionals are advised to:
- Enhance their own capabilities in terms of both technical and analytical/statistical skills & knowledge in order to be able to act as the linking pin between data scientists, IT and “the business”
- Embrace a forward-looking mindset and, as a consequence, allow for less certainty in decision-making and performance management processes: favour relevance and timeliness over completeness and accuracy whenever possible
Not embracing big data & analytics will inevitably mean that the finance function loses ground in decision-support and, hence, in organisational authority and importance.