How would you rate your company on data management and leveraging data when making business decisions? Data is necessary for making effective decisions, but how organizations get, maintain, and leverage their information are crucial data readiness considerations.
For financial executives like the CFO, investing time and financial resources to data readiness lays the groundwork for strong analysis and future business decisions. Companies must achieve data readiness now or they will concede to competitors who more effectively make timely data-informed decisions.
Determining if your Business is Data Ready
An excellent resource for leaders to know if they are data ready is a recent white paper from International Data Corporation and Tableau. The whitepaper describes a data readiness index and gives bands where a company will rate itself as either lagging, developing, or leading. The framework is an excellent tool to break the complexity of data readiness into manageable dimensions for tracking progress. Finance executives must demonstrate that the investment in people and technologies is vital for taking data and making it meaningful. In addition to data readiness, executives need to address how data is stored now and will be stored in the future.
Here are four questions to help determine if your business is lagging, developing or leading towards data readiness.
Do you Have Ample Data Storage?
The storage of data has become more important as the amount of data generated grows exponentially. When the term “the cloud” was first discussed regarding data management/storage it seemed strange that companies would have their data outside the company’s four walls. Even now when searching images for cloud computing there are still images with servers floating on fluffy clouds. Regardless of how it is viewed cloud computing grows more in terms of adoption and number of offerings. The financial executives of the future must be ready to lead cloud migrations. This may include migration from an on-premises solution to a cloud solution. Another likely scenario would be a cloud migration from one provider to another.
Are You Prepared for a Cloud Migration?
The process of planning cloud migration will be like other capital expenditure projections. Finance executives will need to analyze the upfront costs along with the support costs. Regarding these expenditures using cloud software will move the hardware costs from a capital expense to operating expense. With most of the cloud services offered via subscription finance leaders will want to determine which renewal period makes the most sense with price/flexibility. Another key issue to consider would be early termination penalties and whether they would have an opportunity to negotiate before any significant pricing shifts.
Does Your ERP System Match your Stategic Goals?
Finance leaders face a change with the shift among ERP providers. With larger ERP providers moving focus to their cloud offerings the future CFO must be ready for these changes. If a company has an on-premises ERP system, the support for that product will be going away in the not-so-distant future. Companies should look at current cloud ERP offerings and start a dialogue about business needs as part of their strategic plan. The executives should consider what a cloud migration would mean to their internal IT team. If IT staff are freed up from having to handle on-premises monitoring/support, they would have more time open for other high value technology projects.
Is your Data Secure?
Executives must complete a thorough analysis on the security of a cloud migration. Finance leaders will want to ensure that the cloud provider has robust security to protect data. Large providers of cloud storage have robust data protection in place and may often exceed the security of an on-premises solution. Even though the protection of data may be better with a large cloud storage provider finance leaders will want to assess how the company providing cloud storage handles compliance.
After further consideration of data storage and data readiness, what score would you give your company now? Regardless of where companies stand currently now is the time to strive for the leading rating from the data readiness index.
The creation of a data strategy should be part of the broader strategic planning process. The data strategy should plan for revolving data maintenance throughout its lifecycle. Having a plan for data storage from current storage protocols to how data will be stored is a key consideration to cloud migration.
Current and future executives should focus on building their skillsets as well as the data literacy for their teams. Building a knowledgeable workforce is one essential step to glean meaningful insight from data. Through improved training programs it will be easier for employees to collaborate with others and streamline processes regarding data initiatives.
The time is now to evaluate if your business is data ready and begin building (or updating) the data strategy plan to ensure the best use of this asset going forward.