Culture and talent

The key to extracting value from data

As well as the right data, a business
must also have the ability to analyse it. And, to achieve impact, it’s vital to have a culture where:

The use of data is expected, encouraged
and required.
Skills are applied to ensure that insights gained are used to generate value.

Skills for success

Achieving this requires a commitment to talent development that equips the business with a set of competencies and skills (Figure 2), including:

Technical abilities
Commercial skills
Performance management capabilities
Conforming with data management policies and the standards customers expect of the brand

Figure 2 Potential roles for management accountants

This table outlines the competencies a business needs to get value from Big Data — and the key roles finance professionals could play. ^xv

Competencies a business needs

Data management
Data integrity is essential. Business managers’ lack of confidence in the underlying data will undermine any data-based initiative. So, businesses need to ensure that:

Their systems and processes capture relevant data correctly, first time and every time.
The data is then stored accessibly, ready to be used consistently in subsequent interactions with internal users, customers and other stakeholders. This makes processes more efficient and improves the users’ experience.

Customers are concerned about “how” their data is used and if the company is only using the data for their stated intended purpose. Data privacy reviews and transparency is key to customer confidence.

Customers must also be confident in the business’ brand and its systems. They need to know that their payment records, contact details and any other sensitive data are always handled properly and maintained securely. Business managers, too, will be concerned that all forms of commercially sensitive data should not be vulnerable to cyberattack. So, data management is fundamental to ensuring the quality of the data that businesses rely on to inform their key decisions. It’s also vital to ensure conformance with data management policies and procedures. As data is captured and managed on systems, this usually falls into the remit of the IT professional.

Roles finance professionals can play

Data manager
This sort of work can be seen as the domain of the IT professional. However, many management accountants maintain a good understanding of their business’ information systems. As trusted providers of accounting information, they certainly have the professional disciplines necessary to help ensure data quality.

They may also be engaged in contributing discipline and credibility to data information projects or data planning. This is because they are often best positioned both to articulate the needs of users and to determine what data is necessary to inform decisions and manage performance. They should certainly lead on data planning and agreeing on the measures to be tracked. This helps to ensure that the data to be used in performance analysis or management reporting is captured correctly. This includes data about the performance indicators to be tracked, the intended outcomes and the drivers of these outcomes.

Competencies a business needs (continued)

Data analytics
The scale and complexity of the data sets now available to businesses often require advanced
‘data-scientist’ levels of analytical skills for data mining, deriving algorithms and predictive analytics.

A SAS report^xvi has highlighted the shortage of these skills. Some industry experts see this as a looming crisis and have called for widespread training of data-science skills.

However, others believe that most analytics procedures will, with time, become automated and commoditised. Data visualisation tools are already enabling users to recognise trends and correlations. So, as new software enables business users to analyse data on a self-service basis, advanced data skills may not always be necessary for complex analysis.

That’s in the future. In the meantime, forming centres of excellence, ensuring that repeated analysis is automated and providing managers with self-service tools for less advanced analysis will be necessary to ensure the efficient use of data scientists’ scarce expertise.

Roles finance professionals can play (continued)

Data scientist (data analyst)
The shortage of data scientists will make the field attractive to some more ‘quantitative’ management accountants.

It’s likely that there will be opportunities for those prepared to invest in further education to complement their accounting skill set with greater expertise in advanced analytical techniques.

Over time, the current shortage of data scientists may become less of a concern. The combination of natural language processing (NLP) and machine learning will enable management accountants and others to commission some forms of advanced analytics and gain insights without the skills of a data scientist.

Competencies a business needs (continued)

Data culture
For a business to benefit from developments in data and analytics, it must develop a culture of stewardship where:

Decisions are based on evidence and taken in the interests of stakeholders.
Data is valued as an important strategic asset used to improve the competitive position and enable new strategies.
Assumptions are challenged, and decisions are taken on the basis of the best available evidence.

A business also needs the ambition to be innovative. It must be prepared to develop new strategies and make acquisitions to acquire new capabilities or revise its business model.

It also must exercise integrity in how data is managed, going beyond compliance alone to ensure that customers and suppliers have the confidence to allow their data to be gathered and used.

Roles finance professionals can play (continued)

Data champion (steward)
Management accountants already provide professional objectivity. This gives them the potential to be champions of evidence-based decision-making — ensuring that decisions are considered on the basis of their long-term value to stakeholders.

They’re also well-placed to help businesses develop strategies for exploiting the value in data.

For example, the CFO can influence the business culture at a high level. Finance business partners can then cascade that influence throughout business functions and to the operational level in business units where managers will increasingly take ownership of the potential in their data.

Competencies a business needs (continued)

Value creation
Information technology professionals, data scientists, finance professionals and business managers must all collaborate to commercialise analytical insights and achieve impact. The business acumen to identify an opportunity to create value is an important enabler. Intangibles such as customer relationships, human capital and intellectual property are the basis of a business’s potential to generate value.^xvii Measuring and managing these intangibles takes data.

True, strategic insights into customer behaviours that provide new opportunities for profitable revenue may get more attention. But managers must also be alert to other opportunities to create value, through:
• Increasing efficiency
• Reducing risk
• Generating profitable sales
• Improving cash flow
• Focusing on cost management to drive incremental innovation and continuous improvement in business-process efficiency.

This last point can often be the most significant of all.

Roles finance professionals can play (continued)

Business partner
As their roles bring them into contact with all aspects of the business, management accountants are well-positioned to become business partners for business managers, IT professionals and data experts.

Do you expect to increasingly work as the finance business partner to business-unit managers, IT professionals and data scientists to help your organisation maximise value creation?

Very strongly
Fairly strongly
Not at all strongly
Don’t know

“As well as the right data, a business must also have the ability to
analyse it.”