By Adriaan Kom, CCO, Visma | Onguard
Data has grown to become the fuel that powers businesses, both in their daily operations and digital transformation strategies. More organisations are looking to utilise the right technologies and applications to harness the opportunities it provides, but recent research has found that that 27% of finance professionals don’t maximise its potential. Reasons for this are numerous, but a key driving force behind this is the fact that data is entering organisations from numerous sources and is growing rapidly in volume. The amount of data created and consumed in the world each year is expected to continue through 2024 at a CAGR rate of 26%, so it’s of no surprise that data overwhelm is taking hold of businesses. To battle this issue, what key steps do finance professionals need to take?
Keeping pace with competitors
Additional barriers await businesses in the data space, alongside the exponential growth of data and its use cases. According to the latest Visma | Onguard FinTech Barometer, 41% of finance professionals face the challenge of combining data from various internal and external sources. This is also compounded by decisions on how that data should be utilised to benefit the business, whether it’s to drive insight, help to steer the organisation, or to confirm 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 that they’re not offering a service to match those businesses.
This fear also extends to emerging technologies such as artificial intelligence and machine learning, where organisations are taking note of market innovations going on around them, but don’t know how to integrate the same services. 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 finance departments in the last few decades. This is creating further overwhelm among teams as other departments in the business become more reliant on them to provide valuable insights based on the plethora of data available to them.
Picking data to match business objectives
A key step to battling data overwhelm is ensuring that data works for the objectives of the business. 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.
Rushing into implementing new innovations can be a cause of data overwhelm, so it’s important to keep to small, gradual steps and test out new technologies to ensure they fit the business and its objectives before committing to big system overhauls where possible. 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 here.
Leaning on external expertise
Organisations should also remember that data overwhelm isn’t a battle they need to face alone, particularly those at the first stage of a long journey ahead. 26% of finance professionals cited lack of internal 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 those saved hours to applying it to business use cases.
Finance departments also need to be aware of the limitations that come with risk data, which cannot be used in market purposes in most cases, and external expertise can advise on this. 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 organisational engine
The finance department in the modern world is now a key driving force in an organisation, partly driven by the fact that more and more Chief Financial Officers are arriving from technology and digital transformation backgrounds. But for the financial function to fulfil its potential, overcoming data overwhelm is one of the first ports of call. To take the next step, finance departments need to ensure that data matches business objectives, while also taking cautious and incremental steps towards digital transformation and relying on expertise where necessary.