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Enabling a data-driven enterprise
Five reasons why the CFO should govern enterprise data
Historically the CFO and Finance function have been associated with accounting and reporting, not data governance. But given increasing market pressures and business expectations, Finance has developed beyond being a mere data cruncher. We explain below why, in our view, the CFO should govern enterprise data.
The ever-growing importance of data
Data is invaluable yet often not exploited
The world creates tremendous amounts of new data each day, with the volume of data expected to double every two years1. In theory this offers an opportunity for companies that want to leverage their data more. But in practice this often does not happen. Though data is collected and stored in companies’ databases, it is rarely used in analytics. Industry experts estimate that, depending on the business, anywhere between 55-90% of collected data is not utilised for analytics2,3. And yet data is revolutionising businesses and decision-making and becoming ever more important in the effort to stay ahead of the competition.
A growing range of data uses
The range of uses for data is growing and data quality requirements have become increasingly multi-faceted:
- The Board wants data to be consistent for long-term planning
- Accountants are mainly concerned about accuracy to ensure compliant reporting
- Controllers want their data to be granular enough for them to perform the required analyses
- Data scientists look primarily at the volume of data as they combine sources and identify correlations with external factors
With the rise in the number of data analysis tools available and diverse quality requirements, data needs to be integrated and connected across entities with clear underlying ownership and proper management. Using this data will provide the opportunity to enhance long-term performance. The question is who should govern this data in order to make best use of it in the future.
The case for the CFO to own enterprise data
Historically the CFO and Finance function have been associated with accounting and reporting, not data governance. But given increasing market pressures and business expectations, Finance has developed beyond being a mere data cruncher. We explain below why, in our view, the CFO should govern enterprise data.
Where to start?
How should an organisation begin the process of governing and leveraging its data? We would suggest starting with these four steps:
- Firstly, it is important to create a holistic view of the company’s data by creating visibility on data lineage through the joint efforts of the IT and Finance departments
- The second step is to establish data ownership hierarchy and obtain the Board’s backing for it across the whole organisation
- Thirdly, the CFO should take ownership of clear data management policies for data entry, cleansing and maintenance
- Lastly, a shift towards a data-driven enterprise is only possible when employees possess adequate skills, which is why upskilling and the employment of data scientists are key
Do you want to investigate how improving data governance can benefit your organisation? Our experts are there to support you on your journey.
Sources
1 medium.com. (2020). medium.com. Retrieved from https://medium.com/callforcode/the-amount-of-data-in-the-world-doubles-every-two-years-3c0be9263eb1
2 Splunk. (2021). Splunk. Retrieved from https://www.splunk.com/en_us/data-insider/what-is-dark-data.html#real-world-uses-and-trends
3 Telang, P. R. (2019). Forbes. Retrieved from https://www.forbes.com/sites/tomtaulli/2019/10/27/what-you-need-to-know-about-dark-data/?sh=5b660f512c79
Thank you to Nicole Osiecki, a key contributor for this article.
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