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The new CFO is expected to be a strategic thinker and communicator who drives change and value creation throughout the business. That’s well beyond the narrow confines of the finance department. A CFO is no longer allowed to just look back and provide explanations for things that have already happened; now he or she is expected to help a company know what will happen.

Harnessing the power of data is central to mastering this new challenge. Industry after industry is being disrupted by new technology that gives competitors the power to make better decisions, faster. Businesses that have embraced this and are truly treating data as an asset: Google, Amazon, Uber, and Tesla being some of the most well-known examples. They are winning not by small margins but by football fields; those that aren’t are getting trampled. Before long, every successful company will be, in some meaningful way, a data company.

CFOs are in the best position to lead this transformation because of the integrity, rigor, and strategic vision already required by the role. The risk of this transformation being led by the chief information officer or chief technology officer is that those roles often focus on support. Support of the website, support of the systems, support of, oftentimes, the status quo, when what’s really required is vision beyond what’s already being done.

What businesses stand to gain from embracing data is the same level of integrity they get in the financial statements and the high accountability to those numbers that the CFO is best qualified to enforce.

If you don’t yet have your data organized and accurate, there’s nothing data science can do for you, no matter how well it’s sold.

A CFO empowered with data is able to put positive pressure on all areas of the business, in a much more proactive way than has been possible until now. Rather than having to wait until a small crisis turns into a catastrophe, real-time data, for example, might allow a CFO to spot a problem as it’s happening. So, when the website hasn’t taken new orders for an hour, the CFO can intervene immediately.

It’s not that CFOs have never been asked for these kinds of forward-looking insights before. The difference is that, in that past, it might have taken a week-long research project to dig up the relevant data. Now those answers can be at a CFO’s fingertips. Provided, of course, that the company has invested in the data strategy and infrastructure to make all that possible.

In this way, data allows the CFO to become the company-wide champion of leading indicators, meeting the growing demand from CEOs and boards of directors for insights into the business—insights that go beyond the lagging indicators that are the domain of financial statements. The best companies are already doing this. Amazon, for example, measures how many deliveries customers receive rather than how many Amazon ships in order to focus the company on the customer’s experience.

Leading the data strategy also helps the CFO resolve his or her ingrained skepticism over the accuracy and integrity of the numbers they are getting from different departments trying to scramble for a justification for why they’re not performing. By presiding over the new process, CFOs can eliminate data chaos and isolation between departments and be the one to unify the company under a single source of truth.

A CFO starting down this path should begin with three steps:

  1. Identify the metrics that lead to happy customers.
  2. Determine how best to measure them.
  3. Figuring out how the company can be held accountable to them.

Once a CFO has created that one source of truth, it’s his or her job to secure broader investment from the company and use it to create technical systems. Then comes another, equally important step: resisting temptation.

Although billions of dollars are being invested by companies in artificial intelligence and machine learning, it’s important for CFOs to avoid overcompensating for a lack of action so far. Don’t assume a high-priced tech tool can lead the organization to salvation. If you don’t yet have your data organized and accurate, there’s nothing data science can do for you, no matter how well it’s sold.

The gap between the job CFOs think they’re doing and the one they’re actually expected to do continues to widen. That’s a risk for some, but an opportunity for anyone else willing to grow their own ambitions to match the size of the role.

Nathan McMurtrey is a principal for the technology division at Eide Bailly, a business advisory and CPA firm.

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2 responses to “Three Steps to Make CFOs Champions of the Data Revolution”

  1. Fantastic article and is right on target with what I’ve seen, experienced and done over my 37 years, data must be ACT (accurate, complete and timely) in order for any analysis to provide information that can be proactively address the causation and not just identify symptoms!!!!

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