Data platforms: the benefits for CFOs

Oct 26, 2021
  • finance
  • Microsoft
  • SAP
  • data

Whether it’s preparing your financial report for the management meeting, planning, budgeting, forecasting, or analyzing profitability, there is one thing in common that you, as a CFO, need for every task: data! Does your team have ready access to all the organizational data they need  – not only for reporting but also for more complex tasks, like predictive analysis? Is that data reliable and consistent? If not, read on.

The numbers and the metrics: for a finance team, that’s mainly what it’s all about. Your SAP or Microsoft ERP platforms provide you with loads of useful data. But what about the data that’s trapped in IT systems or in tools that are scattered across different systems and not connected to your ERP system? What if other departments ‘shield’ their data? That would mean that you, as a CFO, have no access to sales or customer data – while that influences your organization’s profitability from every angle.

the more data sources and the more complex your organization, the more value a data platform will bring
Ben Reynaert, lead expert business controlling 

Disconnected = inconsistent 

“The larger the enterprise and the more subsidiaries, acquisitions, and disparate IT systems, the more data silos and the more complex the resulting ‘data spaghetti’,” says Pieter Hebben, partner data & analytics. “Such data spaghetti invariably leads to inconsistencies and duplicate data and, as a result, to extra manual work, frustration, and high costs. Most importantly: reporting and analysis are less accurate and less complete, which in turn impacts the quality of business decisions.”  

So, can a consolidation application like SAP Group Reporting or SAP BPC help to connect your data? That’s not the right approach, according to Pieter: “Since CFOs are legally obliged to consolidate data it seems like a logical step. And indeed, the tools do integrate data from multiple sources. Yet, that’s not enough for more complex tasks like performance management or profitability modelling, for example, let alone for forecasting.”

Avoid spaghetti, choose ravioli 

‘Spaghetti’ and ‘ravioli’ are metaphors for two different types of architecture for data and systems:

  • in spaghetti architecture, applications are directly linked with the applications they get their data from. So changes in one application lead to required changes in the other and to linked applications. If you have many of them, you get a complex web of connections.
  • in ravioli architecture, applications touch but are not entangled. They talk to each other via an interface. A ‘data exchange component’ consolidates data and enables interactions between different applications.

Choosing ravioli means choosing a flexible application landscape: once it’s there, applications can more easily be replaced without impacting other applications.

Why build a data platform?

Enter the data platform: a ‘layer’ that aggregates all the data that your organization consumes and generates into one place, where it can be secured, shared, and used. The benefits:

  • A data platform lets you work with any and all data sets, regardless of where they are stored. As it acts as a central repository for all your enterprise-wide data, you are sure to get one single source of truth. Duplicate and overlapping data, inconsistent reports, and manual corrections are a thing of the past.
  • With easy access to consistent, real-time, and high-quality data, your team gets more time – and more insights – for better, more comprehensive analysis and other value-added tasks. 
  • Data platforms open the door to innovation. Since all your data is centralized, it’s easy to adopt machine learning and AI models for predictive analysis or or simulations.

A data platform scales with your business: if your company grows, e.g. through acquisitions, it’ll be easy to add the data of the newly acquired entities. 

No big-bang effort needed

“Building a data platform is neither quick nor easy. It requires a serious investment and effort, but the rewards can be well worth it,” says Ben Reynaert, lead expert business controller. “The more data sources and the more complex the organization, the more value it brings. Even for small enterprises who plan to grow a lot in the future, it makes sense to invest in a data platform – as it lays the foundation for solid data-driven growth.” 

“The good thing is that no big-bang effort is needed. You can build a platform piece by piece, one use case at a time, and reap the first benefits in data quality in weeks or months.”

ensure clarity around data ownership and transparency, in every department
Pieter Hebben, partner data & analytics

The key to success: your people

There is, however, one important prerequisite to take into account: a data platform is not enough to help you leverage the power of data. You’ll have to instill a data-oriented culture that involves all your people – from management down to each individual data user. 

“As a data platform requires a vision for the future of your organization, as well as an investment, you’ll need full support from the C-level,” says Pieter. “On top of that, there must be clarity around data ownership, in every department. If colleagues don’t understand the need for transparency and refuse to share and centralize their data, you’ll never get the 360° view that’s so important to take financial and strategic decisions.”

Interested in building your own data patform but not sure where to start? Download our e-book ‘6 fundamental principles of data analytics’.

e-book ‘6 fundamental principles of data analytics’.

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