Data is now the lifeblood of business. Driving digital transformation initiatives across finance departments requires visibility of data assets and the right technology in place to truly harness it. Hurdles however stand in the way, with only 5% of finance professionals stating that their organisation is fully data driven. Data is now entering organisations from all sides and is rapidly growing in volume, with consumption worldwide predicted to double from 74 zettabytes in 2021 to 149 zettabytes in 2024. It’s a statistic in itself which is almost overwhelming to comprehend, giving an idea of the challenges that finance professionals are now facing in utilising data. Undoubtedly, data overwhelm among finance professionals is real, but how best do they overcome this feeling?
The fear of missing out
Alongside the staggering growth of data sits a range of barriers to becoming fully data driven. According to the latest Visma | Onguard FinTech Barometer, 41% of finance professionals face the challenge of combining data from various internal and external sources, but it’s also about deciding how that data should be utilised to benefit the business, whether it’s to drive insight, helping to steer the organisation, or confirming an idea or strategy. This broad scope that comes with what data can provide is causing finance departments to feel increasingly concerned about what their competitors may be doing with data and is perpetuating a fear of missing out (FOMO).
This FOMO is also prominent in the context of artificial intelligence and machine learning, where organisations are witnessing innovations that are being driven by data but are unsure on how to implement them. This is perhaps reflected in the fact that 37% of finance professionals feel that they lack the right technology to make data optimally available. Without doubt, the digital wave has certainly taken over financial organisations over the last few decades, and this is creating further overwhelm among finance departments as they are increasingly relied on by other departments in the business to provide data insights.
Ensuring that data fits business goals
The fear around data means that it’s crucial to ensure that it is translated into key business information that is intrinsically linked to business goals. Not only will this allow focus among finance professionals in terms of how to utilise it, but will also help them to pick and harness data that matches those objectives, rather than trying to find insights from a broad set of information. While this will help to ease data overwhelm, it is also particularly pertinent for organisations that may be running legacy systems and are unsure of which way to turn when undergoing digital transformation.
Another crucial method to reducing data overwhelm is to take gradual steps and try new innovations out to ensure that they work well for the business. When it comes to digital transformation, it doesn’t always have to be an ‘all in’ strategy and ripping out every old system out to make way for new ones. Agility is the key to ensure that fears around data are eased and financial departments can approach digital transformation with confidence. Testing via an initial pilot will help inform finance departments as to whether to proceed with a new data-driven strategy.
Reaching out for assistance
While it may seem like a minefield that’s almost impossible to traverse, especially for organisations starting on their data journey, they also need to remember that they don’t have to do it alone. 26% of finance professionals cited lack of expertise in data processes and analysis as a main barrier to becoming data driven. Specialists will possess the expertise to help ensure that businesses can harness data opportunities correctly and connect information in the right way. Having this focus can also ensure that data scientists are utilised correctly to benefit finance departments, ultimately spending less time on collecting and curating data and being able to devote hours to applying it to business use cases.
Utilising the right expertise can also help finance departments know the best course of action to take with risk data, which in many cases cannot be used for marketing purposes. Ensuring legislation and laws are met will only become more prominent as data use cases continue to grow. Security and IT departments are also increasingly becoming involved in the handling of data and the process for doing so, and should therefore work closely with the finance department when it comes to strategy to ensure alignment across the business.
The business driving force
Now more than ever, the finance department is growing into the engine that drives an organisation forward, with Chief Financial Officers also now more likely to have a background in technology and digital transformation. In order for those departments to truly fulfil this business value, overcoming data overwhelm, clearly a stumbling block to success, is vital. Key steps to easing the burden are ensuring that chosen data matches business objectives, taking small but incremental steps to help drive digital transformation, and utilising the right expertise from within and outside the business as needed.
This was also published by Finance Digest.