3 minute read 24 Jan 2020
How to redefine the role of finance teams in the age of big data

How to redefine the role of finance teams in the age of big data

Ludovic Deprez
By Ludovic Deprez

EY Belgium Financial Accounting Advisory Services Partner

Someone who enjoys/lives 8 days in a week in order to get a perfect balance between work, family, sport & party.

3 minute read 24 Jan 2020
Related topics Financial accounting advisory services Data and decision intelligence Future of corporate reporting
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  • Financial Accounting Advisory Services (FAAS) global corporate reporting survey 2019 (pdf)

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The role of finance teams must be redefined if stakeholder trust in nonfinancial data gathering is to improve.

Big data; this must have been one of the buzzwords of the last decade. Every single company has invested in ways to collect data or has at least thought about doing so. Companies collect data containing useful information about customers and their preferences, about their own production process or they use data to develop new business. No doubt it has brought a lot of added value. It has certainly had a significant and positive impact on how companies run their daily business.

  • CFO Barometer

    The CFO Barometer is an independent research initiative of the editors of CFO Magazine in cooperation with EY Belgium. A questionnaire concerning an actual CFO topic was answered by a representative sample of around two hundred Belgian CFOs from medium-sized to large multinational companies.

    The focus of the CFO Barometer is local, so the results are very representative of the Belgian market and as such the CFO Barometer becomes a benchmark tool for the CFO active in Belgium. The results are shown here and commented on by specialists and illustrated with practical experiences.

Increasing demand in data gathering puts pressure on finance teams

The other side of the coin is that additional data also implies additional time to deal with this information. Indeed, we have noted an increasing number of company stakeholders requesting information/data gathering (both financial and nonfinancial), which is in turn resulting in higher workloads and less time for finance teams.

A lack of stakeholder trust in nonfinancial data gathering

The pressure on finance teams is held in place by a higher interest and demand of information by stakeholders (other than pure financial information). That becomes apparent when we look at the following frequently asked questions of CFOs and finance managers:

  • What equilibrium should I find between providing data analyses and examining my financial performance (given current constraints of available time and resources)?
  • Are we doing the right things based on a correct set of data?
  • What is the underlying idea when our stakeholders ask for additional data/information?

These questions confirm that finance managers may have issues in finding the balance between stakeholder trust and overall (financial) compliance.

Building trust in data analytics is key

In order for stakeholders to trust data, finance managers need to highlight the following interesting conclusions from the most recent ‘Global Corporate Reporting Survey’ issued by the FAAS department:

  • Create a more open and accountable reporting to win stakeholder trust;
  • Close the culture reporting disconnect;
  • Build trust in data analytics and artificial intelligence.

Redefining the role of the finance department

As mentioned in the picture above, one of the focal points is to give a more important role to financial teams. This can be summarized into two major priorities:

  • Give the finance department a more central role in driving an open and accountable company culture (i.e. focusing on transparency and openness).
  • Clarify the role of the finance department in nonfinancial reporting.

By proceeding this way, more information can be shared with stakeholders - assuming the information shared is credible and trustworthy.

Therefore, the goal is to have a financial department that has a large set of skills and knowledge to create nonfinancial information that is useful and reliable. Because the key to success is having a clear view of the available data; knowing what data is in demand and how to convert the data into useful information.

Generating data using automated data collection

On the question of how data should be generated (given time and resource constraints), one of the priorities is to put in place advanced tools to gather and analyze large amounts of data. In the survey mentioned earlier, it is stated that only 30% of respondents have a scaled solution for automating data collection for corporate reporting, when clearly RPA (Robotic Process Automation) can streamline the close process, and reports can be prepared faster and with fewer people.

The less time people need to spend on collecting data and producing reports, the more time they have to examine and understand it. Understanding data provides valuable insights which can be used to improve the overall (financial) performance. Carly Fiorina (former president and chair of Hewlett-Packard) summarized it fittingly when she said: ‘the goal is to turn data into information, and information into insight’.

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Show resources

  • Download the global corporate reporting survey 2019

    pdf (5 MB)

You can also explore the data behind the survey, and view and compare findings across countries and industries. 

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Summary

The advent of big data has provided many opportunities already, but there remains a lack of stakeholder trust in nonfinancial data gathering. Meanwhile finance teams are pressured into providing more and more data in a clear and transparent way. In order to solve both issues, finance teams need to be given a more important role in the company culture.

About this article

Ludovic Deprez
By Ludovic Deprez

EY Belgium Financial Accounting Advisory Services Partner

Someone who enjoys/lives 8 days in a week in order to get a perfect balance between work, family, sport & party.

Related topics Financial accounting advisory services Data and decision intelligence Future of corporate reporting
Upvote