As markets become increasingly competitive and economic volatility is an everyday occurrence, the traditional finance function within an organization needs a strategic overhaul. As with all other departments, data must now be at the heart of all financial decisions. The CFOs role needs to transition from being the head a decision support function into becoming a catalyst for business growth through strategic advisory. The modern CFO must empower business-critical insights from data across their financial landscape. These insights must help in advance forecasting, planning, and execution of key business initiatives at both customer and operational levels.

However, handling financial data is not easy. Adding the analytical processing to it makes for an even bigger challenge. Organizations need solid data-backed financial operations to avoid missing critical opportunities and also to ensure they don’t focus on activities having poor ROI.

The key challenges in financial data operations

Siloed data and fragmented business systems

Most businesses accumulate a vast amount of data from historic operations. Over time, hundreds of new business systems get integrated into the technology landscape including those in the finance department or function. This diversity in applications and standards of data presents an imposing obstacle on the path to realizing value from organizational data streams. Additionally, it could also disrupt critical financial decision-making due to delayed communication or a lack of support from one of the many different data sources or systems.

Data integrity and compliance issues

Adding to the challenges of bringing together a siloed data ecosystem, most organizations have not implemented meaningful automation in their financial data management. This results in situations where manual calculations or inputs can be error-prone in addition to inputs being delayed as volumes surge. Keep in mind that financial data is not used just for opportunistic or critical decision-making. It is also a key input for ongoing compliance processes for organizations. For example, a public company listed on a stock exchange is mandated by law to disclose its financial performance data in regular periods to different authorities. This data should be compliant with standard reporting requirements apart from being complete, accurate, and updated. Without an effective data management strategy, enterprises will find it hard to ensure data integrity or to meet compliance mandates.

Operational complexity

Financial data folds in a wide range of transactional elements flowing in from different sources. For a typical organization, hundreds of entities may be contributing to the financial ecosystem including partners, vendors, employees, business systems, and much more. Moreover, these data points may originate at different paces at different times in different volumes, for each contributor and stakeholder. To get a complete picture of the business’s financial strength, all this data as well as market and competitor data would need to be analyzed, a task of immense complexity.

Need for agility and flexibility

Modern businesses need a flexible and highly agile financial engine to support key initiatives, often in real-time. Delays and inefficiencies can obstruct critical processes. This could cause operational delays or hinder activities that impact customer experience thereby causing reputational damage and subsequent loss of business. From proactive financial forecasting to empowering innovation through the seamless release of funds for activities, organizations need to be agile and flexible with their finances in several areas. This demands extreme speed, agility, and flexibility in managing financial data operations.

The role of customizable data management platforms in finance

To set up the appropriate financial operations in place to meet the demands of today, enterprises require more than just traditional financial management systems. They need a customizable data management platform that can help with extensive data analysis and intelligent processing. The platform must also help in setting clear directions on profitability, revenue guidance, and budgeting to realize the true potential of their financial data streams.

The platform must create an ecosystem where financial data is processed intelligently to discover trends, risks, anomalies, and opportunities for the business to focus on. The platform must exhibit a high degree of customization flexibility as unique financial, or revenue models tailored to each business must be accommodated without any issue. Additionally, it must integrate with other business systems to ensure the active participation of all departments in financial decision-making.

The platform must use automation to iron out inefficiencies, bias, and bureaucratic delays and ensure accurate visibility into the financial health of the business in real time for key decision-makers.

The key features needed for a custom financial data management platform today

It is important to have a clear understanding of the key features of a modern financial data management platform

Data governance and compliance to ensure that the ownership of every data stream is defined upfront, and responsibilities are always upheld. This will also enable better compliance with data standards, regulatory oversight, and other commitments the business has that depend on their financial data.

Scalability for the ability to accommodate growing volumes of financial data in tune with the growth of the business without losing analytical and strategic power.

Advanced analytics to power deep dives into granular patterns and trends hidden within data streams and ensure profitable progress in a data-driven business roadmap.

Security and risk management to acquire confidence in the ability to protect sensitive financial information and data across the operational landscape of the business.

A robust financial data management platform can help enterprises gain deep visibility into operational efficiency and effectiveness in their key business processes. This is achieved by mapping financial strength against revenue forecasts and actuals for all practices and initiatives which can identify gaps and opportunities for the business to improve at the right time and in the right areas. Solid financial data management will also help the business prioritize investments and expenditures when a data management platform drives decision-making. It will also prevent any delays caused by the need to manually obtain go-aheads and budget approvals by email communication.

Get in touch with us to learn how to pick the right financial data management platform.