In the modern business landscape, the significance of data is universally acknowledged; however, the quality of this data is often underestimated, despite its profound impact on daily operations. The majority of operational failures can be traced back to substandard data. Surprisingly, most organizations do not manage their data with the diligence they afford other critical assets. A study by HFS Research in collaboration with Syniti involving over 300 leaders from Global 2000 companies, found that fewer than 40% have established metrics to assess the repercussions of poor data.
The call for a paradigm shift is clear. It is imperative, especially for CFOs, to take assertive steps to ensure the cleanliness of their data, unlocking growth and technological advancements for their businesses as they progress into the future.
For any digital transformation or AI initiatives—areas heavily invested in by CFOs—high-quality data is essential. The lack of quality data can severely compromise the effectiveness of new digital processes. As AI becomes increasingly crucial, the quality of data has never been more important.
This quality also plays a critical role in mergers, acquisitions, and divestitures, aiding in substantiating deal rationale, identifying customer and supplier synergies, and facilitating successful integrations.
A staggering 85% of leaders from Global 2000 companies recognize that effective data management significantly boosts revenue, profit, and shareholder value. This awareness marks a positive shift in understanding.
Despite this growing awareness, many CFOs remain skeptical about the reliability of their organization's data. A BlackLine survey revealed that 37% of senior finance and accounting professionals do not fully trust the financial data at their disposal. Additionally, a study by Horváth highlighted that 57% of CFOs view poor data quality as a major obstacle to fostering a data-driven culture.
A third of financial leaders surveyed by BlackLine attributed their mistrust in data to its origins from multiple sources, complicating the management and integrity of the information.
The repercussions of inadequate data quality are extensive:
These issues not only complicate decision-making but also undermine a CFO’s role as a trusted advisor.
Today's CFO transcends traditional financial roles, driving operational performance and shaping corporate culture to spur growth. As trusted advisors, CFOs need precise data reflective of the company's real-time operations. They should take a proactive stance in both measuring and enhancing data quality.
CFOs must acknowledge that data issues often stem from flawed processes, leading to a vicious cycle of inefficiencies. Addressing data quality should be a preliminary step in resolving operational challenges.
CFOs should:
Rejecting data produced outside trusted systems is crucial. By thoroughly understanding data rules and related business impacts, CFOs can better design processes to avoid future data issues.
In an era where data drives decisions, CFOs cannot afford to passively await solutions from IT departments. Instead, they must spearhead efforts to promote a Data First culture, tackle process inadequacies, and enforce robust governance. Such proactive measures will cement their reputation as strategic and reliable leaders, essential for guiding their companies toward sustained success.