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9 Expert Insights on Being a Data-Driven CFO
In the modern world, data and information have become one of the most valuable assets. For CFOs, data has always been crucial in every strategic aspect of managing a business. In this article, we share 9 insights on how data impacts CFO’s work.
1. Data Supports Decision-Making
Data-driven decision-making means using facts, metrics, and data to guide strategic business decisions that align with your goals, objectives, and initiatives. CFOs help the rest of the C-suite make decisions by providing explanations behind the data that high-ranking executives will use to plan and decide on strategic business moves. By providing key decision-makers in the company with the data needed to create and implement their plans, the company’s overall strategy will improve.
CFOs supervise not only finance but the financial data being shared throughout the company, putting them in a central position to affect change and support the company’s further advancement. The result of data-driven decision-making is good cost control and increased productivity based on real-time information, which improves the bottom line.
2. Data Must Be Received Timely and Accurately
CFOs assist a large, diverse set of high-ranking executives who expect timely and accurate reporting. CFOs are focused on producing required financial reporting each period while at the same time helping executives who expect to receive analytics reflecting their own specific field of work, such as KPI. The company’s C-suite and management expect quality data from the financial office’s leader.
During the verification and review process, errors jeopardize the efficiency of finance teams and the security of the reports. Inattentiveness may cause mistakes in measurements, data, and computations. Once errors are discovered, finance teams waste time examining and validating data to rectify them.
Another complication is having to accommodate business and economic events to reporting, as well as accounting, tax, and legal changes that may require months of planning for new analysis data.
3. Breakdown of Information Silos
No matter if a business uses a data lake or a data warehouse, all businesses must start with an information audit to know what’s out there, and then they should break data silos. Isolated groups of data held by different business units make it unreadable or inaccessible by data tools and, consequently, by workers and CFOs.
Data silos occur for various reasons across various industries, but mostly because once a company is big enough, workers begin to split into separate departments or business units, to rationalize work processes, and be focused and effective. However, if the flow of information between departments slows, data silos begin to form.
Financial planning and budgeting are critical for the company’s operation, but data silos mean that important supporting data may be left out of financial analyzes and reports.
4. Data Needs Fast Integration
Today’s CFOs know that rapid data integration and analytics are vital to boosting company performance and alleviating the constantly changing risk environment.
Any business should have a CRM, ERP, or any other system that allows putting all the information together. Put in data from the very first customer, prospect, or lead touch. CFOs need to understand the data they have, and how to pass it from system to system, or at least how to query and get access to the information. A company can implement APIs to ensure smooth data flow and usage.
New technologies are available that can help CFOs and their teams integrate this data and get a holistic business approach as a strategy that connects every department in an organization to help them work as one team.
5. Departments Should Have The Same Objectives
In many companies, there may be understanding among employees on the shared missions and objectives at the macro level, but the main goal becomes more difficult to sustain when it comes to departments, business units, and divisions.
Divisions use KPIs to demonstrate the value of their work to the company. These performance indicators help departments go toward a set goal and track the challenges along the way. But there are situations where each department defies a KPI in its own way, and each unit ends up tracking its own KPIs. It may seem like teams track their progress, improve results, and stay on track, but in reality, they go further from a global goal just by chasing their own KPIs. Democratization of data is essential to establish standard KPI characteristics and a single source of truth.
6. Data Keeps You Ahead of Competitors
Data collecting and analyzing became even more important in the competition with the new technologies that let companies swiftly process vast amounts of data. Digital products and services can now directly gather information on customers, including their personal details, search behavior, GPS location, and usage patterns. After a system analyzes the information, a company’s offerings can be automatically adjusted to current customers’ needs.
A data-driven CFO can look at the data and better define who the target market is, and who the company is marketing to. For a company, data-based conclusions would have better results for consumer targeting, retargeting, retention, conversion, and churn reduction. The old-fashioned approaches must be modernized with data science and business intelligence to stay in the competition.
7. Data Allows You to Use Predictive Models
While no one can know what the future holds, a savvy CFO can use predictive analytics to grasp market dynamics and use that insight to drive company growth. CFOs have always created forecasts to help their business plan for the future, but real-time data has also enabled predictive models. By using advanced analytics, CFOs can provide businesses with greater efficiency, agility, and strategic understanding.
Advanced analytics help CFOs protect against volatility and respond faster to changing market conditions in pricing, the supply chain, and other areas. By analyzing real-time tendencies, CFOs can help their companies prepare for imminent changes. Also, predictive models enable CFOs to forecast the pipeline more accurately so that in the future the company will get an expected outcome.
8. Digitalize Processes and Operations According to Data
According to collaborative research from PYMNTS and Versapay, 70% of CFOs said they are digitizing accounts receivable (AR) and accounts payable (AP) processes because they consider it crucial for increasing the lifetime value of their customers, and 86% of CFOs believe digitizing their AR and AP operations is highly important to boosting customer satisfaction, retention, and revenue.
As a result of the pandemic, there’s been an enlarged demand for electronic payment processes from vendors and customers. CFOs are taking extra steps to refine the customer experience and increase customers’ lifetime value to the company, such as offering a variety of new payment terms. This not only improves relationships with vendors and customers, but they can also make transactions more efficient overall.
9. Implement Comfi
One of the extra steps mentioned above can be implementing a Buy Now Pay Later payment method. Using Comfi as a BNPL allows businesses to offer their customers new payment terms. With Comfi, customers of a SaaS company can split their annual subscription payments into 12 interest-free tranches over 12 months, while Comfi pays the vendor the whole sum upfront within 7 days.
Implementing such a convenient payment method facilitates business-customer relationship improvement and helps customers make a purchasing decision faster. It serves as additional leverage for sales and marketing teams.
It seamlessly merges into the sales process and the payment system. Integrating the Comfi BNPL payment method on your pricing page gives customers an opportunity to split payments, improving the overall experience and reducing the churn rate.
All in All
To enable business growth, CFOs use data analytics to gain insight and make better decisions to drive the company forward. Data plays a crucial role in company operations. The information must be accurate, accessible, collected timely, and analyzed thoroughly because decision-making depends on it. Comfi gives opportunities to businesses to improve customers’ LTV by providing them with new payment terms.
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