Data analytics can be used to make more forward-looking, proactive decisions and to foster more collaborative relationships.
Today’s business ecosystem is defined by risk, uncertainty and ongoing disruption. As leaders are increasingly discovering, threats emanate from both within – and outside of – organisations. These threats impact the work and decisions required of CFOs and financial managers, demanding a more collaborative and responsive role based on data-driven insights.
When assessing the risk landscape, one of the greatest internal threats is complacency - and failure to evolve and adapt to digital transformation. This complacency can see businesses losing market share to more agile and digitally savvy rivals. Similarly, complacency around cyber security and data privacy has seen companies fall into financial and reputational ruin.
Indeed, in the World Economic Forum’s Global Risks Report 2019, ‘technological instability’ was a stated risk – with “massive data fraud and theft” ranked the number four global risk (over a 10-year horizon) and “cyber attacks” coming in at number five. According to the South African Banking Risk Information Centre (SABRIC), South Africa currently has the third highest number of cybercrime victims worldwide – with the country losing an estimated R2.2 billion a year to cyber attacks.
For CFOs and financial departments, these stats underscore the importance of investing in the right data security solutions and strategies – and driving the security agenda at the highest level.
Data as the bridge to innovation
The intelligent adoption and implementation of technology becomes critical in this equation – and here, data and analytics/Business Intelligence comes into force. Put simply, Business Intelligence (BI) is the process of analysing data to glean actionable information and insights. These insights can reveal previously hidden operational weaknesses (waste, inefficiency, etc); identify potential ways to increase bottom-line profits; and unveil strategies to increase agility and overall market competitiveness.
From the CFO and financial management perspective, data analytics can be used to make more forward-looking, proactive decisions – based on real-time data, instead of taking decisions retroactively, and responding. It can also be used to foster a more collaborative relationship with CEOs and executive leadership, working together on real-time data that sits in the Cloud.
Data privacy = business continuity
While data is undoubtedly one of the most valuable assets that now resides within a business, it also represents a severe threat to business survival if that data is compromised in any way. New data privacy regulations such as the EU’s General Data Protection Regulation and South Africa’s Protection of Personal Information Act impose strict financial penalties for non-compliance. Yet keeping data secure in a world whereby cyber fraud and hacking has become highly advanced and sophisticated is no small task.
Again, taking a proactive approach and harnessing technology can place companies in a position of power. For larger businesses with IT teams to support them, trends such as Zero Trust (introduced by analyst firm Forrester Research), is an alternative architecture for IT security. In essence, Zero Trust is a security concept based on the belief that businesses should not automatically trust anything inside or outside its perimeters. Instead, businesses must verify anything and everything trying to connect to its systems before granting access.
While concepts such as Zero Trust are still emerging in the local market, CFOs and other decision-makers can play a vital role in steering businesses to embrace forward-thinking and less traditional solutions to the challenges of the digital world.