FSN’s 2018 research entitled Innovation in Reporting highlights the crucial importance of data management and governance in either stifling or accelerating innovation in financial and management reporting.
The report defines four categories of finance function, namely; the “Data Overloaded” who are overwhelmed by too many data sources and poor data governance; the “Data Constrained” who cannot get hold of the data they need to drive insight and the “Technology Constrained” who have packaged the data but do not have the tools or tech-savvy resources to exploit it. Only 19% of finance functions claim to be “Data Masters” (the remaining category) who actively manage data as a corporate resource and have the tools and resources needed to provide competitive edge and insight.
Yet data mastery is pivotal to innovation. The report finds that nearly 60% of Data Masters have undertaken innovative financial reporting projects in the last three years compared to just 42% of Data Overloaded finance functions. Furthermore, Data Masters outperform their peers when it comes to the speed and accuracy of forecasting and their ability to close the books. 36% of Data Masters can close their books within 3 days compared to just 10% of the Data Overloaded.
So, the obvious question is what does it take to become a Data Master? Fortunately, the report shines a light on the attributes of Data Masters highlighting an amalgam of cultural, organisational and technology related factors. In broad terms, Data Masters are less challenged by cultural failings and in-house politics. And neither are they paralysed by a fear of failure. These characteristics make them more attractive to tech-savvy talent and so, for example, 77% of Technology Constrained finance functions suffer from a lack of technology savvy talent whereas only 53% of Data Masters are similarly affected.
Data Masters also have the upper hand when it comes to technology. The biggest challenge to collaboration in reporting for all categories is everyone working off different reporting platforms and not having ‘one version of the truth’. However, only 46% of Data Masters are affected by this, compared to 73% of the Data Overload, 66% of the Data Constrained and 62% of the Technology Constrained.
Reporting solutions such as Certent certainly help to support Data Masters by providing a single version of the truth in a robust and unified reporting environment. Solutions such as these also help Data Masters to shine in the boardroom, by providing more dynamic, responsive, insightful and extensible reporting. But all of this is a ‘means to an end’ rather than ‘an end in itself’. Smart CFOs know that data mastery is a staging post on the way to delivering a modern finance function. Data Masters have the time to spend on innovation and in a highly competitive environment it is innovation that allows companies to thrive, grow and break out of the pack.
For additional insight gathered from the FSN survey, download your copy of Innovation in Reporting.