How Your Finance Team Can Lead Your Enterprise Data Transformation
By Michelle Cloutier
Published on October 26, 2021
Today’s best-performing organizations embrace data for strategic decision-making. Because of the criticality of the data they deal with, we think that finance teams should lead the enterprise adoption of data and analytics solutions. And while some might see finance as the most conservative department in an enterprise, we believe that they can become innovators, driving how their business consumes and uses data.
Recent articles extol the benefits of supercharging analytics for finance departments . For example, a recent study showed that 70% of CIOs say they’ve accelerated their finance transformation by at least a year . Although operations and sales departments tend to champion the use of data for business insight , we’ve found that finance departments are often the first adopters of the Alation Data Catalog within an organization. This is because accurate data is “table stakes” for finance teams. They need trusted data to drive reliable reporting, decision-making, and risk reduction.
A Strong Data Culture Supports Strategic Decision Making
Our successful customers invest in and infuse data and analytics throughout the enterprise. These organizations that build an organization-wide data culture enjoy clear and compelling benefits. In our recent State of Data Culture Report, Alation found that nearly every organization (86%) with a top-tier data culture met or exceeded its revenue targets. In contrast, only 36% of organizations with a weak data culture can say the same.
When an enterprise ignores or cannot use their data, they suffer the consequences. These include missing out on new revenue opportunities, poorly forecasting performance, and making bad investments. And who gets the blame? The Chief Financial Officer (CFO) is most often the scapegoat for such failures, particularly if they’ve been reluctant to invest in technology to support the wider use of data across the organization. By contrast, when an enterprise achieves its revenue goals, the CFO will get the kudos for wisely investing in the right technology that led to success.
Building a Data Culture Within a Finance Department
Our finance users tell us that their first exposure to the Alation Data Catalog often comes soon after the launch of organization-wide data transformation efforts. After all, finance is one of the greatest consumers of data within a business.
Finance departments often start with the basics, building a business glossary in the Alation Data Catalog to support data-driven reports and decision making. A business glossary helps an organization agree and align on internal definitions. By using a business glossary, financial analysts can save untold hours previously spent on reconciling discrepancies in definitions, formulas, and reporting from other areas of the business. Consistent, reliable reporting can then drive more positive outcomes for the entire business, including improved compliance, risk reduction, and increased revenue.
“We needed to have one place that everyone could look to for the definite definition of certain finance related terms.” — Senior Systems Analyst at a Major Pharmaceutical Company
Finance teams soon realize other key benefits of the Alation Data Catalog. Not only do these companies see increased analyst productivity and improved reporting accuracy. They enjoy improved governance, which follows from documenting ownership of business terms and formulas. And, by implementing continuous data reviews, finance teams better support compliance and risk management. In many ways, the catalog is a foundational platform for human collaboration around trusted data.
With Alation, finance teams gain an end-to-end data management perspective. Business terms are clearly defined within the glossary, eliminating confusion over meaning. The glossary includes the definition of the metric and can point to the specific table containing the formula from which it is calculated. And the formulas map to the data used to create them.
“We now have a finance division-wide definition of what certain fields mean so that if somebody asks why their number doesn’t match someone else’s, we can point to that formula and ask them if they are using the same formula.” — Senior Systems Analyst at a Major Pharmaceutical Company
Alation allows finance teams to easily identify business metric owners and connect these experts to the underlying data they know best, which supports better governance. Organizations can use special fields in Alation to drill down into the underlying data to further pinpoint ownership and improve data governance.
With the power to investigate an asset’s entire history, folks can understand their data entirely. One finance team used the special fields to identify the source system and the system’s business owner behind their metrics. Another used special fields to identify which business areas, such as Customer or Product, were tied to the metrics in the business glossary.
Improved governance flows from these improved processes. Clearly defining the meaning and formulas behind business metrics, identifying metric ownership, and tying the glossary to the underlying data all help finance teams better govern data.
“Not only are we defining the ownership for the business term but we’re also able to connect it to the data if there is data associated with it.” — Senior Systems Analyst at a Major Pharmaceutical Company
Because data ownership is clearly defined, finance departments can easily conduct data reviews to ensure data accuracy and relevance. They can add metadata in the business glossary to indicate what types of compliance reporting a term supports. One group “certifies” certain catalog entries to verify that they are governed end-to-end, and that the business logic and any changes to the definitions are clearly documented.
How Finance Departments Can Drive Data Culture
Finance departments are extremely well-positioned to drive the adoption of a data culture within a business. They require clear, well-defined business metrics for accurate reporting and data-driven decision making. Their need to comply with an ever-growing number of regulations requires stringent data controls and lineage that only well-governed data can provide. And they work for the CFO, the person often named as either the villain or the hero in a company’s data transformation saga.
Start small, but start somewhere:
Realize that your department is probably already swimming in data. Corral that data, starting with the implementation of a data catalog such as Alation. Follow in the footsteps of our successful customers by building a business glossary of defined metrics, tying them to their respective formulas. Strengthen data governance and support compliance by clearly identifying data ownership and establishing data reviews.
What is most critical to the business? Our customers recommend you focus here first. That is, what would help the business make better-informed decisions, evaluate risk, and prepare for uncertainty with more predictability? Don’t be afraid to be simple in your answer!
“Don’t overthink it. Simple is more consumable, and if you overcomplicate it, nobody will use it.” — Director of Enterprise Data Management at a Global Software Company
Build on what you have:
After building out your business glossary, add special fields and tagging as needed to boost governance and support compliance. Spread the word about how and why your finance organization is using Alation to create accurate and timely reports. And provide opportunities to increase data literacy throughout the organization with formal training.
Start Today with the Alation Data Catalog
Organizations with a strong data culture use data to drive new revenue opportunities, more accurate forecasting, and smarter investments. Start by investing in a data catalog or data intelligence solution to begin building your organization’s data culture. Alation is designed with a user-friendly interface and rapid deployment capabilities: you can be using it in a couple of hours.
Tell your CFO you want to invest in data and analytics. Better yet, have your CFO give us a call or join a weekly live demo. Your finance department and your CFO can soon become data heroes to the rest of your organization.
1.https://fintechmagazine.com/venture-capital/finance-transformation-analytics 2.https://fintechmagazine.com/venture-capital/finance-transformation-analytics 3.https://fortune.com/2021/09/15/do-you-need-to-hire-a-progressive-cio/
- A Strong Data Culture Supports Strategic Decision Making
- Building a Data Culture Within a Finance Department
- How Finance Departments Can Drive Data Culture
- Start Today with the Alation Data Catalog