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Ten Ways to Make your Team more Data Driven

insightsoftware -
September 29, 2021

insightsoftware is the global provider of enterprise software solutions for the Office of the CFO to connect to & make sense of data in real time, driving financial intelligence across […]

The Importance of Data-Driven Finance Leaders

As the economic landscape rapidly changes, the roles of CFOs and Finance leaders have transformed into those of strategists and innovators. More than ever before, businesspeople rely on their Finance leaders to drive strategic initiatives and business growth, not just report the numbers, to help manage global risk and operations and better serve customers.

To meet this shift in roles, the new breed of Finance leader is increasingly becoming data-driven, combining quality data drawn from multiple sources to put strategic decisions in context and choose the highest-impact business direction.

How Finance Leaders Use Data to Support Decision-Making

Data-driven Finance leaders use metrics to look at what the business should do next, rather than only look back at how well they performed in the past. They use data and software with machine learning (artificial intelligence) to model and compare ‘what-if’ scenarios to grow the business. In response to changing circumstances, real-time data is used to understand variances and isolate issues. Early detection enables Finance leaders to prioritize possible solutions for course correction or opportunities for future growth.

Rather than overload business leaders with as much data as possible, effective Finance leaders must guide decisions with refined data. By presenting insights from their analyses and using data to support recommendations, Finance leaders can help overcome “Analysis Paralysis,” rather than be the source of it.

Data-driven Finance leaders are only as successful as the teams supporting them. Fostering a culture where data is trusted and relied upon to inform decisions is essential to meet objectives.

So, how data-driven is your team?

10 Ways to Make Your Team More Data-Driven

We’ve sourced the top 10 ways to make your team more data-driven:

  • Create a Data-Driven culture. Empower all employees to actively use data in their daily workflows. Numbers create common ground that aligns employees to business goals and increases buy-in. Enable your team to see how their inputted information affects the numbers, and wider business goals. This increases accountability within your team. Data-driven culture promotes collaboration between different teams. Breaking down silos and increased information sharing makes initiatives more successful–increased transparency across the business helps set strategy that encompasses both financial and operational goals.
  1. Provide Access to Quality Data. Quality data is accurate, relevant, and complete. Although ensuring data collection is accurate and reliable is important, leveraging data for strategic decision-making is essential. Make data accessible to all employees who need it to make decisions. Quality data provided in real-time creates trust in the numbers and confidence in decision-making. Not all decision makers are finance professionals, so you need to present data in a format that makes information understandable and useable by leaders in your organisation.
  1. Improve Data Literacy.Understanding the importance of quality data and how it affects decision making is imperative. By improving data literacy, you are not only ensuring the quality of your data, but also empowering your staff to have the confidence to use data to make decisions. Provide training to ensure end users can understand and interpret data and use it to make better business decisions. Training for both new hires and continuing staff ensures data best practices and prevents bad habits. Self-service analytics tools help speed and simplify data preparation and analytics tasks for your staff. Empowering staff with improved data literacy empowers them to take action.
  1. Understand That Data is an Asset (Not a By-Product). Placing data at the center of business processes makes it clear that data is an important asset. Determine what data is needed to solve problems, achieve goals, or inform strategic decision making, and design systems and processes around this. It is essential that management and key stakeholders also understand the importance of quality data and how it informs decision-making. Executive buy-in helps when trying to implement new data-focused systems and processes. By considering data at every level of your organization, you re-enforce the values of data-driven culture.
  1. Treat Data as an Integral Part of the Business.Lead by example and treat data as king. Define and examine business goals using data. Align KPIs and other metrics to your business goals and be transparent about these from the beginning. Re-evaluate past strategic decisions using data. Track and test potential initiatives and use this data to set company direction and strategy. Enforce the expectation that data will be used to evaluate every decision–this will help increase accountability for decisions and ensure that decisions made are backed by data, and not based on gut feel. Highlight the importance of data and how it informs decision-making by including data as a recurring agenda item in meetings–topics can include updates in data systems or processes or best practices for data handling.
  1. Avoid “Vanity Metrics’.Ensure that data collected helps you understand performance in a way that informs future strategies. To avoid large volumes of unusable data, only measure what will truly inform your decisions. Maintaining a more manageable data set will also help prevent analysis paralysis. Ensure that you prevent confirmation bias by collecting and analysing data that supports all potential initiatives, and not just the initiative that you have a stake in or believe is right. This step is two-fold: analyze and address negative data. Don’t avoid or explain away data that reflects poor performance. Negative data is just as important in providing insights as data that backs your chosen strategy.
  2. Reduce Data Bias.Unconscious bias in finance can make it difficult to verify the logic used to make strategic decisions. By accepting that bias in decision-making is a given, you can create a system designed to reduce bias. Create analyses with diverse departments and levels; including different perspectives throughout the process can reduce data bias and maximize potential solutions. Bias means that we often think too narrowly about the future and possible outcomes–planning for multiple scenarios, challenging assumptions, and verifying your data can help reduce data bias in your teams.

 For more tips on how you can reduce data bias in Finance, see our How to Reduce Data Bias in Finance Blog.

  1. Create an Agile Environment.Employ powerful tools and a platform that encourages collaboration (for example, allowing discussion) and supports multiple roles. This improves teamwork and enables informed, confident, rapid decision-making. Tools that allow task allocation and track WIP items assist with increasing transparency and ensure that processes and strategy can be course corrected quickly. Using data to test scenarios and measure performance throughout projects and changing economic conditions helps your team stay agile and ahead of the competition.
  1. Invest in Data Collection and Constantly Improve Your Data Stack. By providing systems that allow secure and accurate data collection, you can ensure the quality of your data. Improvements in business intelligence, artificial intelligence and enterprise performance management technology has seen an increase in digital transformations. A data platform that offers automated data collection and processing saves time and effort and frees up Finance teams to focus on more important tasks, such as providing support for decision-making.
  1. Use Modern Governance Methods. Confidently ensure data privacy, proactively comply with regulations, and allow easy collaboration with data professionals in every function of your organisation with modern governance methods. Protect and manage your data to prevent data degradation and decisions made based on poor data. Too often data governance policies protect data, but in doing so also slows or even prevents access to it. That means slower time to market or missed opportunities. Create a governance strategy that allows trusted data to be provided in real-time. This could mean employing a data champion, setting policies and procedures, and a designing a committee dedicated to data protection.

Don’t let the length of this list deter you from starting your journey. A solid enterprise performance management (EPM) strategy backed by technology can help create a systemised approach to bring together disparate data and quickly cover many of these items.

Where To Begin?

To position yourself with the best chance of success in a data-driven world, you need to empower your employees with quality data and the right training and tools.

insigthtsoftware offers powerful and flexible software backed by a team of experts who can work with you toimplement an integrated reporting and planning solution and provide guidance on how to achieve your strategic goals. To speak to one of our team, contact us today.

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