Data is not an IT problem anymore, which is why CFOs need to get involved in its lifecycle in a business, says Serisha.
Every CFO knows how critical data has become to everything from customer engagement and optimising business processes to new product innovation and identifying future growth opportunities despite today’s challenging market conditions. You rely on data to see the future, reflect on the past and plan for tomorrow.
While some companies will gain a competitive advantage from their data in a data-driven world, others will fall behind and lose relevance. Success or failure comes down to accessing quality data to make informed decisions as close to real-time as possible to the modern business.
Therefore, data must be treated like the important asset it is while ensuring the organisation adheres to all the required governance frameworks. This includes the most recent Protection of Personal Information Act (POPIA), which saw a deadline for compliance on 1 July. Of course, maintaining good data stewardship policies is easier said than done, especially as data continues to grow in volume, variety, variability, and complexity.
Cost management
And for businesses already struggling under continued lockdown conditions, data-related costs can be crippling. McKinsey research shows that global spend on data-related costs was expected to increase by nearly 50 percent over the 2019 to 2021 period compared to 2016 to 2018. It believes that the answer to these spiralling costs could very well be better management of data.
Several factors influence this. These include understanding the value drivers (think customer engagement and process optimisation), coming to terms with business and technology risk factors, the regulatory mandates, the data landscape challenges, and the data governance maturity of the organisation.
Much like any digital transformation project, data management is an ongoing concern requiring continuous process review, policy updating, management, and improvement. This requires CFOs to work more closely with data teams to identify the tools that embed data governance capabilities throughout their functionality. Yes, this minimises cost, but it also ensures that data can be more consistently managed across the entire organisation regardless of where employees are working from.
Data quality
Critically, data is not an IT problem anymore, which is why CFOs need to get involved in its lifecycle in a business. An integral part of this is to consider how data quality spans both the business strategy and the technology being used. To this end, a digital transformation strategy cannot be considered complete without it informing the data quality strategy. The one simply cannot operate without the other.
For instance, a company might focus on strengthening cross-sell revenue opportunities with existing customers. The data quality most important here is that which informs its understanding of its customers (their preferences, prior purchases, current activity, and so on). Bad data only reinforces bias and inaccurate insights.
Unfortunately, the answer is not as straightforward as copying data from one database to the other. This only adds to the data sprawl, creates duplicate instances of the data, and results in no single version of the truth being available to decision-makers.
Instead, data virtualisation becomes a key consideration. This enables the organisation to integrate its data without physically copying it. So, it reduces the number of copies floating around. At the same time, it also provides the opportunity to enrich the data with additional functionality that talks to the needs of the different business units.
Going virtual
Data virtualisation provides both business and your IT teams with numerous benefits.
On the one hand, it delivers data in a business-friendly style instead of the more traditional IT schemas of the past. This ensures consistency with the business definitions used within the organisation. Virtualisation also results in a faster time-to-data, meaning business leaders and CFOs can take advantage of the latest data from across distributed data sources and respond to evolving market requirements faster.
Furthermore, data virtualisation assists the company to enforce access controls across all its data. This assists in complying with regulations that include those, like POPIA, which require encryption and masking of personally identifiable information.
Business case
Once all this has been done and considered, a compelling business case can be developed. This must reflect the advantages of going this route and create a financial case that justifies the investment.
The focus must be on the financial benefits that data management and optimisation can provide the organisation. Aspects such as revenue growth, cost savings, and risk reduction are vital to providing the CFO with the ammunition necessary to convince the rest of the C-suite at a boardroom level. Costs are another important component in this regard. But more than the technology, it must also reflect the people and the processes such as upskilling and reskilling the workforce, appointing data specialists, and how processes need to be modernised for the evolving governance environment.
Data will always be a critical asset. How the CFO helps manage and govern it with the rest of the business will be instrumental in whether the business can leverage it effectively and efficiently for the requirements of the digital era. Data management in a business can simply no longer just be left up to IT teams to own the process.
