The Role of Data is essential for CFOs

AAFCPAs’ recent CFO Survey revealed that having access to more data is undoubtfully essential but not new to CFOs. It is now more routine than anything else. What is next on their radar is understanding how to fully utilize it in a way that crosses over traditional boundaries of pure accounting.

The pandemic brought this into focus as executive teams scrambled to make sense of a unique situation. Data has always been used by businesses to separate themselves from the competition. But now, as we think about economic recovery from COVID — and risk management for similar disruptions in the future — CFOs have realized how critical data intelligence is to their future success and sustainability. They also place a higher value on sharing information across departments in order to keep stakeholders apprised and aligned.

We asked CFOs: To what extent have you defined key business questions (KBQs) that determine which key performance indicators (KPIs) and metrics you analyze?

Respondents reported the most progress in defining Descriptive and Compliance related KBQs.

Usage of Descriptive (Historical) Data appears to be the focus, with 96% of respondents reporting moderate to a great deal of progress defining KBQs that determine which KPIs and metrics to analyze.

We asked CFOs: What is the most important KBQ(s) you hope to answer heading into 2021?

With so much turmoil, most respondents shared KBQs that were more Predictive and Prescriptive.

When the sudden need for Prescriptive and Predictive data eclipsed the need for the traditional focus on Historical and Descriptive data, a pain point was exposed for many organizations. Respondents reported that collecting Predictive and Prescriptive data is the weakest link, at a time when that information would be the most helpful. Equally telling was that CFOs reported “lack of visibility/less informed direction” as the most glaring opportunity cost for not leveraging data. The ability to resolve that is directly tied to Predictive and Prescriptive data — which also boosts the CFO’s goals of creating a clear financial picture and maintaining a focus on the future.

AAFCPAs’ Viewpoint

The pandemic impacted our lives and businesses in ways none of us have experienced before, and the aftermath — or perhaps more accurately, the continued disruption — is testing our ability to adapt.

KBQs will change as the picture becomes clearer. In fact, the right KBQs lead to data that clarifies the environment and thereby prompts CFOs to re-evaluate the next set of KBQs.

Read more Insights from CFOs on Data Use.>>