Technology has shifted the way we do business. While the financial industry has always been driven by numbers, the way in which we approach data management has vastly changed. Today, data is not just the focus of Chief Financial Officers, but every other aspect of the enterprise is equally confronted with managing information effectively and efficiently.
The power of mindset
Creating a data-driven culture requires a collaborative mindset on all levels of the organization. It is based on the principles of organizing and sharing information, focusing on planning and forecasting and easing workflow processes. The pandemic has underscored the evolving role of the CFO as a value partner who informs how the business operates beyond the numbers. While executive buy-in is an essential component to building collaboration, one of the greatest stumbling blocks for enterprises today is fragmented data strewn across multiple silos without automated processes to keep decision-makers informed in real time.
According to a recent CFO Research and FTI Consulting study, more than 40% of the surveyed executives said the pandemic had a significant impact on cost management, financial planning and analysis, and budgeting and forecasting. And more than one-third of the survey respondents said that risk management, treasury and working capital management, technology adoption, and accounting and financial reporting were significantly impacted.
But only 27% said that at least one in five members of their finance team were virtual, which suggests that automation has not reached its full potential in most organization. Eliminating and automating manual processes was a high priority or critical priority for 52% of the surveyed executives.
The right tools for the right time
Given the massive flow of information streaming into Excel spreadsheets, true collaborative teamwork is only possible when financial data is consolidated into one single solution. If data is used for planning purposes, for instance, the first step is to integrate the enterprise’s data foundation. Planning tools should allow for collaboration on various forecast scenarios and forecast drivers between different users of the tool. Collaboration may include workflows and different scenarios, resulting in a fully operating system between your data foundation, people, processes and insights.
The case of Banque CIC
With over 30 million clients and 30 billion euros in equity, Banque CIC is a wholly-owned subsidiary of Crédit Mutuel, one of the best-capitalized banks in Europe. Based on its century-old history and 6.1 billion swiss francs in assets, Banque CIC offers prudent money management, a diverse product portfolio, and high-quality personalized servie. Like any bank, executives at Banque CIC rely on data accuracy to make decisions. Embracing a data-driven culture with a unified approach, its financial controlling department sought to optimize the cost-center structure and establish contribution costing and allocate costs to–and between–departments.
Because its legacy BI solution was no longer able to meet the controlling department’s requirements, the controlling team needed more flexibility and transparency with the ability to model the bank’s financial performance without accompanying IT support. They selected an intuitive tool that allowed them to do more than just data discover, but also planning, modeling, and reporting.
The new tool also allowed decision-makers to easily capture complex business rules without any programming. Now management has a real-time overview of activity costs and profitability. Relying on one point of truth promotes collaboration among the various departments, especially during month-end reporting cycles.
From spreadsheet sprawl to data consolidation
Eurazeo, a leading global investment company with offices in Paris, New York, Shanghai and elsewhere, provides another example of the power of embracing a data-driven culture in the financial services sector.
With a portfolio of over 40 companies of all sizes and sectors, the company manages approximately EUR 16 billion in diversified assets. During a phase of heavy expansion, Eurazeo required a smart, centralized performance management solution to support its newly founded management control department. The goal was to present and analyze investments using a common set of financial metrics along with specific operational indicators for each company.
In light of the frequent acquisitions and growing number of investments, it was also important to structure the financial information so it could beshared more easily. The financial performance director sought an all-in-one tool powered by a database that could support built-in calculations, simulations, and reporting in a collaborative environment.
Starting small, the director launched a project to develop a reporting database for 10 investments. In the first wo months, an overly complex spreadsheet was replaced with a powerful database; soon after, capabilities were added to manage exchange rates, differences in closing dates, and investment rates using different consolidation models. By selecting a collaborative solution, Eurazeo simplified the way it shares information with investees, investment teams, and shareholders while forming the backbone for international growth and an ongoing exploration for new investments.
When applied correctly, data can be a significant business driver. But like any data point, it needs to be viewed in the overall business context. Selecting the appropriate processes and tools to support a data-driven culture is a step in the right direction.
