The following is an excerpt by Guest Acceleration Economy Analyst, Lukas Sundahl which appeared in the Future Office of the CFO edition of the Acceleration Economy Journal. The September 2021 issue addressed the role executives play in technology investments, how automation architecture impacts business processes, developing partnerships for optimal business continuity, cybersecurity and risk mitigations, the importance of deep analytical skills, and much more.
Imagine yourself in a boardroom reimagining business models and customer experience with your peers. Throughout the meeting, the importance of technology and data comes up repeatedly in conversation. Next, the discussion shifts to you for your input on data within the finance function. What do you share with the group about data and ways to ensure that the company does more with it?
Tomorrow’s CFO needs to understand the importance of data and not let data projects be shuffled into a nice-to-have category. The use of data to analyze the past and predict the future will continue to accelerate. Businesses already have technologies available that free up time such as robotic process automation. Preparing for the future means finance leaders need to take the time to learn what is available in terms of making data meaningful.
If the number of tools to analyze and make sense of data seems overwhelming, take a moment to step back. Before starting down the road of planning a data project we should evaluate the data literacy of the organization. The dashboards and reports will not be meaningful if the people at the company do not understand the underlying data.
Quickly reviewing the fundamentals, it is imperative that we have a company where people are comfortable with these four characteristics of data literacy:
- Reading Data
- Working with Data
- Analyzing Data
- Communicating with Data
Data literacy will increase in importance as the amount of data generated continues to grow exponentially. Automation technologies will continue to become mainstream in business and take away the need for data entry. This shift should be viewed as an opportunity for employees and not a threat. The time freed up, via the reduction of manual tasks, gives these employees a chance to work on activities that provide more value to the organization.
If existing employees are learning and applying data literacy skills, they will be able to provide better insights about company performance. The improvement of their skillset not only helps them contribute to the company in the present but also makes them more marketable for future job opportunities. It is important for universities to make the shift and be more proactive in teaching data literacy skills.
There are some schools that have pioneered programs to help students make an impact right away at a new job. Students that graduate with high proficiency in Excel will be in higher demand as well. This stems from Excel still being a workhorse when it comes to data cleaning, data exploration, dashboards, etc.
It is important to note that the data literacy skill set is important for employees at all levels. In fact, it should be a situation where executives “set the tone at the top” and demonstrate their commitment to improving data skills right alongside the other employees. Recent articles from Gartner discuss how organizations are appointing Chief Data Officers thus demonstrating the importance of this skill set. Executives must invest the time, energy, and capital to ensure the workforce is data literate. The amount of data generated will not slow down so emerging finance leaders must educate themselves and be ready to drive these literacy initiatives.
In addition to executives, the board of directors should be encouraged to make themselves data literate. Board members should have the option to participate in training/courses offered to internal employees. With board members having a better understanding of data they could provide more value to executives when communicating and analyzing data. It is important for the board to understand how the presented results were analyzed and compiled so they can ask better questions to the executive team. If the board does not have a solid data literacy framework, they may overlook errors or withhold questions and simply assume that everything presented is accurate. Stakeholders would be much more comfortable if both the company and board members had a solid understanding of the four levels of data literacy.
The organizational value from a data literate workforce will continue to grow. If companies continue to adopt automation processes employees will be freed up to help with other initiatives. Combining automation tools with a data literate workforce provides more time for employees to work with and analyze data. In fact, let’s quickly review the 4 levels of analytics and how employees freed up from manual tasks can provide value within this framework.
There is so much potential value from employees with time freed up from manual tasks. Front line employees have such a solid understanding of operations in their departments. With manual tasks reduced they would be able to participate in and/or provide input for analysis. These employees would also be able to provide insight as well on what steps the company could pursue to achieve targets related to levels three and four from the analytics framework. Forecasting would be much easier if all levels of employees had solid data skills combined with their knowledge of operations.
Turning back to the board room do you feel more comfortable speaking about and using data to drive decision-making? Now is the time to not only improve our own data literacy but also to plan steps to get your company up to speed with this skill set. The relevance of data literacy will continue to grow in importance as the amount of data generated climbs higher and higher.
Tomorrow’s CFO will have to move well beyond simple historical reporting and compliance. The emerging leaders of finance will need to be well versed in data literacy to meet future business demands.