The Power of Data
There is a wealth of data and wealth in data. However, the true asset is in the power of data.
But, what does power mean? In its simplest form it means:
Now, think about this from the aspect of the CFO. The CFO role has shifted to a more forward-looking role and leveraging the power of data can greatly influence the trajectory of the company.
It’s vitally important to note that data governance is needed throughout all of the data lifecycles. Additionally, many organizations have implemented a Center of Excellence to aid with governance guidance.
Why is all this governance necessary?
For want of a nail the shoe was lost. For want of a shoe the horse was lost. For want of a horse the rider was lost. For want of a rider the battle was lost. For want of a battle the kingdom was lost. And all for the want of a horseshoe nail. - Anon (https://nationalpoetryday.co.uk/poem/for-want-of-a-nail/)
Missing data, bad data, and partial data can all impact the decision outcomes. The strategic input from the CFO is sought by people, internal and external. If bad data is factored into the analysis, this can put the CFO’s decisions in the risky territory and cause downstream failures.
Enterprise resource planning (ERP) systems are no longer the only system of truth for finances. Other forms of data exist that influence financial decision:
- Structured data
- Excel, Google Sheets, SQL, customer data, phone records, transaction history
- Unstructured data
- Text data, social media comments, phone calls transcriptions, various logs files, images, audio, video
How do these forms of data play into all of this?
Some of the structured data examples might seem obvious. However, the unstructured data may seem less so. Now, let’s put some context to this.
Your organization sells widgets and has cornered the market on them for a long time now. However, consumers don’t purchase widgets like they used to. The factors that influence decisions today can directly impact when, where, and how the consumer purchases your widgets.
The consumer notices the widget on a social media site in the form of an ad. They might jump over to another site to read the reviews from other consumers. Then they may visit your website to see more details about the widget and watch a video on how the widget works.
All this research by the consumer impacts their purchasing decision. If set up properly, your organization can capture much of this information to provide the right information on the right platforms at the right time.
Lastly, ask yourself these questions:
- Do you have confidence in your data?
- Do you truly trust it?
- Can consumers trust your data?
- In-video reference: https://www.ey.com/en_gl/covid-19/how-do-cfos-reshape-today-to-reinvent-their-tomorrow