Today’s business environment is increasingly competitive, and most organizations are looking for a way to differentiate their offering, stand out from the crowd or increase their economic moat. For many, that advantage is implementing new technology, enabling fast data mining, and using leading-edge analytical tools.
FP&A teams are skilled at pulling data from various information systems, manipulating it, and gathering insights. Although FP&A plays a crucial role in supporting companies in becoming more intelligent, there is a lot to think about when getting ready for big data and the FP&A transformation journey. Below are a few things to consider. This list will continue to evolve as we all learn from each other.
Create a data-driven decision-making culture
Buy-in by the top executives is critical for the ultimate success of Big Data initiatives. Initiatives can change an entire organization’s culture, enabling more real-time decision-making and promoting a culture of asking questions, gathering evidence, and continuous learning. The aim is to develop a state of behavior where traditional business unit siloes disappear. Trying a reward and recognition program around a one team effort may align behavior and reward.
Executives and employees need to be committed to acting on insights based on the data. If insights for improvement uncovered by technology are ignored, this may negatively impact employee motivation and morale.
Moving away from consensus and identifying a clear decision-maker are helpful ways of driving results. Enlist executive sponsorship and insert team champions. Start by communicating the vision and being transparent and honest about the objectives. Once the vision is shared, pick a small group of volunteers, and run a pilot. Then a roadshow to show off the results of the pilot will get people motivated.
Strive for one source of truth
A technology landscape can help strike a balance between meeting the enterprise’s needs today and allowing for changes in the future. This balance will allow one source of truth, eliminate the reporting queue with secure self-service, unlock more insights by blending data across multiple sources. These insights should be aligned with financial targets and tied to individual goals.
The best way to embark on big data is to start small and look at “low-hanging fruit.” Start to focus on your first pilot vs. going big all at once.
Determine what data is useful
“Let’s solve this problem by using the Big Data none of us has the slightest idea what to do with it.”
FP&A traditionally deals with highly structured and verifiable data. But big data adds a new level of complexity. It is easy to be overwhelmed by the magnitude of data availability. An excellent way to start is to realize that not all data is equally important and create a process to determine the benefits of various analyses.
Finance should partner with executives to decide what data is valuable.
- Frame some business questions that the business wants answers on and focus the analysis on answering those questions.
- Implement governance around the data selected for analysis and the key performance metrics to use. Imagine how quarterly business reviews that focus on valid key business drivers will deliver value-add insights, eliminating the “noise” of data overload.
- Introduce new technology and analytical tools to free up FP&A resources.
Everyone has a hunch on what is going on in the business. Still, practical analysis of the data can help ensure decisions are indeed based on facts, patterns, business results, and not guesses or feelings.
Help your team grow
“You can do better with your team than you can alone.”
FP&A leaders should also look at what they can accomplish today. Below a starting checklist:
- Talent: Expand team beyond traditional background by hiring diversity candidates and focusing on power skills and behaviors. Communication, interpersonal, and leadership skills become more critical as we work in the new silo-less, big data generating environment. Hiring managers bootcamp can be run across the organization to share tools, interview questions, and behaviors to observe that will help FP&A increase the high success rate in identifying the right talent.
- Training: FP&A leaders must have strategies to ensure everyone is trained on the technology, uses it appropriately, and understands and reports results based on it.
- Psychological safety: An open environment that encourages team creativity is a must. Openness will allow everyone to learn together, share ideas, ask questions in a psychologically safe environment. Encourage your team to share learnings from their mistake, and the key is also to share yours. It will help build trust.
- Goals: Set ambitious goals and let your team drive the outcomes around analytics and insights. They may not all be achievable, but they will certainly focus your people and yield impressive results.
Ensure a mindset shift
“You can do absolutely anything you set your mind to achieve.”
Embedded fact-based decision-making requires a shift in mindset. Challenge yourself continually: Think ahead of where you need to be, so you do not get caught up in short term delivery. A “growth mindset” is essential. This aligns with the future of finance to supporting and becoming the workforce of the future.
Key themes are about learning, forgiveness, and playful curiosity. Be open and explore new ways to manage, analyze, and extract value from data, apply analytical and critical thinking skills to address strategic issues, and identify the most valuable questions Big Data can answer. Play to your natural strengths. Human abilities naturally detect and understand patterns.
FP&A has an important role to play in the world of big data. Getting information based on data into the hands of those who need it and on a real-time basis will be part of our roles even more today. A clear and easy to understand FP&A transformation roadmap, a shared growth mindset across the organization, and a focus on talent and training are a few components that will enable FP&A to help the organization gain that competitive advantage. This advantage will also allow us to free up time to analyze the data, tell the story, and fix problems. FP&A can help organizations to get smarter.