In Australia, it’s easy to feel pessimistic about the current business climate.
Just after businesses had emerged from the pandemic, they faced another period riddled with uncertainty and challenges stemming from rising inflation, rapid monetary tightening and supply chain issues.
According to the Australian Financial Review’s Freshwater Strategy business survey, almost half of all businesses believe that recession is near, with small businesses in particular worried about what’s to come. Businesses are most concerned about regulatory uncertainty, staffing issues and rising costs, the survey found.
It’s crucial that businesses feel supported and protected during this period of uncertainty.
It’s been a rollercoaster ride for everyone over the last few years, especially for Chief Financial Officers (CFOs) and CEOs, who have had to steer organisations through unprecedented crises.
Unfortunately, with the financial markets going into turmoil over the last few months and consumers of all shapes and sizes starting to cut back on spending, the uncertainty isn’t going to stop anytime soon.
Finance is protecting its tech
The good news is that finance leaders understand the role that technology plays in helping them claim a tighter grip on finances. A whopping 98 per cent of CFOs said they wanted to protect their digital investments, with another 66 per cent saying they actually planned to increase their investments in this area to improve performance efficiency.
But it’s not enough to just invest in the right technology to steer a business out of such uncertainty; CFOs and their teams must be equipped to make the best use of it. For many, this is easier said than done, which is why I have outlined seven ways finance leaders and their teams can gain data clarity in an uncertain climate:
- Be prepared for more volume, variety and velocity: New technology, processes and closer enquiry means more volume, variety and velocity of data. There is a real risk of being deluged by data, particularly if the finance team is analysing data from other functions around the business. To combat this, CFOs need to be sure they can extract the right data to compel action in real-time, find efficiencies in processes and help drive change that can improve operations.
- Put a clean data source in place: Getting a clean data source in place is crucial, but is a concept many organisations struggle with, let alone thinking how they can get into a position to perform analytics and make business decisions with the data. However, CFOs and finance teams need to capture all of this data into one complete source – once they have done this, they will begin trusting the data.
- Develop a holistic data strategy: Extracting the right data can be an overwhelming task for those in the finance team, who are responsible for delivering the right strategic guidance, but often lack deep understanding of how each function operates. This is why developing a holistic strategy and making the right digital investments to help pull it together is essential.
- Get clarity on organisational KPIs: It’s impossible to measure success and performance if a baseline hasn’t been agreed across the business. Everyone needs to be clear on what a great job looks like. Then it’s time to map where this data comes from and to work with functions that own it to get access, and this is the important part – doing so in real-time.
- Real-time data is the lynchpin for success: In a rapidly changing environment, the ability to access and analyse real-time data is everything. Up-to-date data is currency; outdated data is a potential debt. Current data provides live views into financial performance; and helps pinpoint areas for improvement and where your business may need to pivot when necessary.
- Bring disparate data together: Too often, data is siloed in different operational systems and can’t be automatically accessed in real-time for analysis. But through a modern approach, data from different sources can be combined and made available through analytics. When real-time data is used, it can create usable insights that generate meaningful actions. This level of analytics should be the end-goal: an organisation that unifies core processes and can react in real-time to insights triggered within a single system.
- Easy access supports agile decision-making: Having this data is great but being able to access it easily is what makes it invaluable. There are apps out there which enable CFOs to look at numbers in real-time with just a swipe on a screen. This type of user-friendly approach to financial data enables leaders to make instant decisions to improve their business, acting with confidence and certainty.
Moving forwards with clarity
Futureproofing is a responsibility that is now falling into the hands of CFOs. 80 per cent of Australian CFOs have seen increased responsibility in identifying strategy and future planning, as well as digital transformation, over the last 12 months. It is clear that these two things go hand-in-hand – an effective data strategy is what can insulate businesses from present and future challenges.
No-one can say with certainty what the next few years will entail, which is a heavy burden for CFOs to bear given the responsibility they hold for the businesses they serve. History has taught us that those who act intelligently and continue to make smart investments are the most likely to rebound. Breaking down silos to access the right, trusted data can help an organisation gain as much clarity as possible when everything in the world outside seems uncertain.
