Does your resume include a big-data initiative that actually drives revenue? Join us as Samuel Dergel explains what sets one big-data initiative apart from the rest and how career-minded finance leaders are modifying their career narratives to include their big-data feats of distinction. ¤
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Driving Change: The Ah-Hah! Moment
DERGEL: Yes. The big challenge is there’s so much data and what does company do with it? And asking it from the finance side, the CFO side, it’s what do we do with the information we have? Are we getting all the information that we need and how are we analyzing it for ourselves and for what our purposes and how are we helping the rest of the business? So, it’s what are we doing with it so that we can be the best finance function possible in and of our self and how are we as finance assisting the rest of the organization.
I blogged about this in the last few months, I called it Analytics, Shmanalytics, why the CFO should care. Sometimes in the day-to-day requirements of what the CFO is responsible for, it doesn’t always focus on relevant future-oriented analysis. It’s a lot easier to deal with what happened and what will happen.
CFOTL: What does this mean for finance leadership?
DERGEL: When it comes to digital data, the information paradigm, you go back to the 90s where it’s simple. It was enterprise, it was related to transactions and summarizing them across the organization but over the last few years, there's confusion out there when we talk about big data, who's data, where's the data sitting, what we do with it, who's using it. And across the organization, operationally on the marketing and sales side, IT, finance, these are all areas where data is heavy. It's sitting somewhere or it's created in what to do with it and the idea that data is available to be sliced and diced and analyzed and allow for the transition from data to information to wisdom exists. The only issue is how is that applied to my organization and that's where the big question mark ends up because there's no right way for all companies and each company has to figure it out for themselves.
CFOTL: It would seem that finance professionals in light of their career development or in general, well-oriented to tackle some of their firm's data challenges. But the fact is that accounting background isn't necessary and other professionals are helping their companies in this area. It seems like for finance leadership, there is an area of collaboration, it might be an opportunity for finance to really demonstrate these collaborative skill sets that they're supposed to be putting forth as they look to work more closely to grow businesses.
DERGEL: Yes. The big challenge is there's so much data and what does company do with it? And asking it from the finance side, the CFO side, it's what do we do with the information we have? Are we getting all the information that we need and how are we analyzing it for ourselves and for what our purposes and how are we helping the rest of the business? So, it's what are we doing with it so that we can be the best finance function possible in and of our self and how are we as finance assisting the rest of the organization. I blogged about this in the last few months, I called it Analytics, Shmanalytics, why the CFO should care. Sometimes in the day-to-day requirements of what the CFO is responsible for, it doesn't always focus on relevant future-oriented analysis. It's a lot easier to deal with what happened and what will happen. There's this perception and probably rightfully so within finance that FP&A, the analysis part of our business is a crystal ball with which we really don't understand what's going to happen and we are trying to predict things and never turns out the way we actually predict it.
I had a conversation with CFO recently. We talked about the different parts of their finance group. Tax is what it is and we're either on side or we're off side and how do we plan to be on side. We have it on the compliance side and on the consulting side, and it’s how do we plan for the future events that we're trying to make happen. So, tax is simple, accounting is literally debits and credits and yes, it can be complicated but in the end it either is or it isn't correct with some margin of maneuvering.
You have costing in operation, you have all these parts of the business but when it's talking about future oriented information, it's this either black box or crystal ball and that's where many challenges of the finance organization exist.
CFOTL: Let us know, for those aspiring to become finance leaders, and they're looking to jump to the next level, what does this experience mean on an aspiring finance leader's resume? I mean the fact that they've helped with perhaps data analytics initiative, senior finance executive and a middle market firm that helped the firm adopts its analytics, does it mean anything? Do you find clients coming to you and saying, "Look, we need somebody who gets this stuff," I mean how important is it today?
DERGEL: I would break down CFOs into three buckets. You have your compliance oriented CFO because of the situations that they're in which is very compliance heavy and compliance driven, they are focused on making sure that things are on side because that's the most important thing in that business from a finance side. There is the operational CFO where their integration in the business is very oriented on making the current action plan happen and being a key partner in that. And then there's the strategic CFO that is really involved in the forward-thinking planning for making the business happen over a longer term objective. Data analytics is really hot in the operational side where it's the combination of revenue and gross margin maximization and then making the bottomline work as much as possible and the relationship between the sales side and the product or the middle side of the business. That's really where analytics is hot today because if you take a look at the projects and the reasons why companies are deciding to make heavy investments, both in terms of technology and process and people, it's because there's low-hanging fruit there, the ability to improve the business by understanding how the company is supposed to make money and tweaking accordingly so that each tweak has a big impact on objectives of revenue and bottomline.