Finance directors who effectively gather and share data are better prepared to make good decisions for the business than those who do not.
This is especially the case given the increasing volumes of data that finance departments must deal with.
In this environment, top professionals understand the value of analysing the challenges of data so that they can address them. Three of the most pressing of these challenges are examined in this article.
Lack of data quality
Data quality is not a new challenge for finance directors. However, as data volumes increase, ensuring quality becomes more difficult. The most successful directors overcome this challenge by integrating systems such as CRP and ERM where possible and automating data entry.
Taking these actions allows data to be synchronised across systems. Data also flows more effectively, making access simpler and quicker.
IT infrastructure that does not support easy access to data
Some IT systems use proprietary data formats or act in other ways that make it complicated to export data. For example, data may be held across different stand-alone systems that act as silos. This is often especially likely to happen following an M&A process. This type of complication can be costly as it often requires expenditure on consultants to release the valuable data.
Using a business intelligence tool helps finance directors overcome IT challenges by organising data into finance dashboards. These dashboards make business decisions easier by providing insights to finance directors, the wider finance team, and other key stakeholders.
Extensive use of manual processes
Manual analysis was a staple of traditional finance teams. However, it can make analysis far more time-consuming than necessary, and mistakes can be made. In addition, people can look at data in different ways, depending on their background and perspective.
The most efficient way of addressing the challenge of manual analysis is to utilise modern systems to conduct analysis. Doing so standardises processes, making them more efficient and less error prone. Top finance directors know that removing manual processes where possible and digitalising analysis makes business decisions quicker, more cost-effective, and more accurate.
Addressing the challenges
Before the challenges mentioned above can be addressed, they must be identified in an organisation. No business can afford to be complacent and assume they do not have any issues. The best way to identify these issues is to assess the finance function. Doing this reveals how it works, establishing a baseline for improvements.
The results of this assessment show where there is a lack of data quality, where manual processes can be digitalised, and how the IT processes used can be improved or replaced. Following the assessment of the current situation, the next step forward-thinking professionals take is to develop short-term fixes for challenges and plan to make permanent changes in the long term. Completing this work brings rewards for the business as more effective financial data collection and processing enables clearer, more cost-effective, and faster decision-making in real time.