It’s easy in Australia to be pessimistic when it comes to the current business environment.
After the businesses recovered from the pandemic they were faced with a new period of uncertainty and challenges resulting from rising inflation rates, rapid monetary tightening, and supply chain problems.
According to the Australian Financial Review’s Freshwater Strategy survey, nearly half of businesses believe a recession is imminent, and small businesses are particularly concerned about what lies ahead. The survey revealed that businesses are most worried about regulatory uncertainty and staffing issues, as well as rising costs.
During this time of uncertainty, it’s important that businesses feel protected and supported.
The last few years have been an emotional rollercoaster for everyone, but especially for CEOs and Chief Financial Officers who had to navigate their organisations through unprecedented crises.
Uncertainty is not going to go away anytime soon, as the financial markets have been in turmoil for the past few months, and consumers of every size and shape are starting to reduce their spending.
The finance industry is protecting its technology
Finance leaders are beginning to understand how technology can help them gain a better grip on their finances. The CFOs are adamant that they want to protect digital investments. Another 66 percent said they plan to boost their investment in this area.
It’s not enough for CFOs to invest in the latest technology. They must also be equipped with the skills to use it effectively. This is harder than it sounds for many. That’s why I’ve outlined seven steps finance leaders can take to gain data clarity during an uncertain time.
- Prepare for greater volume, diversity and speed:New technologies, processes, and closer inquiry mean more volume and variety of data. The risk is that the finance team will be overwhelmed by data. This is especially true if they are analysing data coming from other departments. To counter this, CFOs must be sure that they can extract the correct data to force action in real time, find efficiencies in process and drive change to improve operations.
- Create a clean source of data: A clean source of data is essential, but many organisations are struggling to achieve it, never mind how they will be able to use the data for analytics or business decisions. The CFOs and the finance teams must capture all this data in one place. Once they do, they can start to trust it.
- Develop an holistic data strategy.Extracting data that is relevant to the business can be a daunting task for the finance team. They are responsible for providing the best strategic advice, but lack a deep understanding of the way each function works. It is important to develop a holistic data strategy, and make the right digital investments in order to pull it all together.
- Clarify organisational KPIs. Without a common baseline, it’s impossible to assess success and performance. Everyone must be clear about what a good job looks like. It’s then time to identify where the data is coming from, and work with the functions who own it in order to gain access. This part is important – working in real-time.
- Real time data is the key to success. In a world that is constantly changing, the ability of a company to access and analyze real-time information is crucial. Data that is up-to-date is valuable; data that is outdated is a debt. Data is current and provides a live view of financial performance. It also helps identify areas that need improvement, and places where your business might have to pivot.
- Combine disparate data:Data is often siloed into different operational systems, and cannot be accessed automatically in real-time to analyze. With a modern method, data from multiple sources can be combined to create analytics. Real-time data can be used to generate insights and actions that are meaningful. The end goal should be to achieve this level of analytics: an organization that can unify core processes, and react in real time to insights triggered by a single system.
- Easy Access supports agile decision making: It is not enough to have this data, but it is also important that you can access it quickly. Apps allow CFOs the ability to view numbers in real time with a simple swipe of a screen. With this user-friendly financial data approach, leaders can make quick decisions and act with confidence to improve their businesses.
Clarity is the key to moving forward
CFOs are now responsible for futureproofing. Over the past 12 months, 80 percent of Australian CFOs were given more responsibility for identifying strategies and future planning as well as digitalization. This is a clear indication that the two go together – a data-driven strategy can protect businesses from current and future challenges.
Nobody can predict with certainty what will happen in the coming years. This is a huge burden to carry for CFOs, given their responsibility for the companies they represent. The history has shown us that those who invest intelligently, act wisely and make the right decisions are more likely to recover. By breaking down silos and gaining access to the most trusted data, an organisation can gain the greatest clarity when the outside world seems uncertain.