New opportunities for automated data consolidation extend the reach of financial reporting and analysis. But will that be enough for CFOs?
When I was CIO, no department demanded more data than finance. Finance had a team of financial analysts manipulating data in a myriad of spreadsheets and reports, and a demanding CFO who always wanted more data.
Financial analysts and CFOs were hard to please. They wanted daily, weekly, monthly and quarterly reports, as well as data for risk assessments and what-if scenario analyses. Finance used troves of reports to extract the information they wanted to see, but it never felt like enough.
TO SEE: Electronic Data Disposal Policy (TechRepublic Premium)
“The biggest problem facing CFOs isn’t lack of access to reports,” said Didi Gurfinkel, CEO and co-founder of DataRails, a financial process and reporting automatator. “CFOs can (eventually) get the information and reports they need to make financial decisions, create models, produce management reports, etc. The biggest concern is the cumbersome process of producing these reports .”
This tedious manual process involves an entire team of financial analysts who screen financial data from systems ranging from ERP and general ledger to CRM and sales. Data from each system is reviewed daily, and at some point the data from these systems must be manually aggregated and integrated into a spreadsheet capable of answering standard and non-standard questions.
TO SEE: 5 Challenges to Implementing a Quality Assurance Strategy in Data and Analytics Projects (TechRepublic)
“When using this process, what CFOs, financial analysts and business leaders miss is full and unfettered access to consolidated reports and to have all the insights available from the data to close at hand,” Gurfinkel said.
This is where analytics tools like dashboards and explorations start to come into their own. They make data much easier to navigate and, more importantly, to learn in a timely manner.
However, to get to this point, data from multiple systems must first be consolidated into a central database, and this work should not be done manually by a financial analyst fiddling with a spreadsheet. Instead, data consolidation can be done with system automation. This saves financial analysts time, reduces the risk of human error, and speeds time to market for reports. The end result is a dashboard that summarizes the data and lets you drill down into the details. This allows finance to create many reports and scenarios with data that will help it meet its insatiable need for information.
Gurfinkel mentioned a use case where a company’s finance department spent hours manually consolidating financial information from multiple data sources. Information from QuickBooks was exported into Excel spreadsheets and then reconciled, which required tedious work. Thereafter, finance would go through hours of editing to ensure accuracy and prepare the information for company and management use. By moving to automated data consolidation, staff were able to see instant version comparisons and generate reports through a single, interactive, consolidated platform. “They now save more than 15 hours a week, time that used to be spent on time-consuming manual processes,” Gurfinkel said.
TO SEE: Data privacy laws are constantly changing: make sure your business is up to date (TechRepublic)
This does not solve all finance reporting needs. But data consolidation and automation that supports analytics can bring together more data from a variety of sources faster and save employees time. The process also makes finance more IT-autonomous.
However, “One of the biggest challenges when offering automated data consolidation is the willingness of companies to take the leap. This is understandable because finance executives who have been crunching numbers and producing reports manually via spreadsheets for decades naturally don’t want the whole system to change drastically in a short period of time,” Gurfinkel said.
This is why IT and other technology leaders need to be aware of business process change (and resistance) when trying to implement automation for analytics.
As with most analytics and automation efforts, finance needs to be fully involved in the project and determine how they want their business processes to change in order to benefit from the automation.
“With the help of automation, data consolidation is a way to revolutionize the way finance does business, with far-reaching implications for the business; however, implementation is the key to a successful digital transition,” Gurfinkel said.
I would support this, adding that successful implementation depends on IT and Finance guiding the new process until it is fully accepted across the business, starting with the CFO.
Comments are closed.