The role of the CFO has changed in response to the acceleration of digital transformation. This has resulted in a shift from historical reporting and analysis to the CFO now becoming a strategic driver of forecasting and planning, steering performance across all areas of business operations.
Cloud-based forecasting and planning solutions have allowed finance teams to take on greater responsibility for shaping more agile and resilient organisations. This includes setting and tracking robust key performance indicators (KPIs), implementing contingency planning, conducting flexible decision-making through access to real-time data insights, and building a culture of collaboration with data-sharing across the enterprise.
Achieving these new capabilities involves unifying both financial and non-financial data sets to deliver a comprehensive view of overall business performance, risks and challenges. The key to success is technology that enables effective data consolidation, and drives nimble and data-driven financial modelling powered by cross-departmental collaboration.
CFOs can now use digital solutions that unify disparate data types to replace long planning cycles and short-lived plans with an agile planning approach that is collaborative, continuous, and encompasses both financial and non-financial data.
CFOs are well aware of the importance of financial data for business planning, but there are still many who have not recognised the critical role of non-financial data and its impact on planning and performance.
According to research conducted by the FSN Modern Finance Forum, more than half of the CFOs and senior executives who leverage non-financial data can forecast with 90-95 percent accuracy. This compares to only 29 percent of CFOs who have not increased their use of non-financial data. Finance teams that use non-financial data are also twice as able to accurately forecast beyond 12 months compared to those who do not effectively use this resource. 
Incorporating non-financial data from sources such as customer and marketing reports, supplier information, and operational data, provides a more holistic view of the organisation, and factors that can impact business operations, than financial data can deliver on its own.
The ability to unify financial and non-financial data in near-real time helps the finance team be more responsive to changes within the business. This is achieved by delivering accurate and timely data insights that support strategic decision-making, which maximises opportunities and reduces organisational risk.
There is no doubt that data is the new global currency, and those who can harness their data effectively are likely to be a market leader. For example, digital accelerators are early adopter organisations that have already learned how to capture, consolidate, and automate data to drive business success, regardless of market conditions. This is achieved through dynamic, active planning that involves finance teams conducting rolling forecasts and optimising operations based on consolidated, real-time data. Organisations that have adopted active planning are almost twice as able to forecast earnings accurately to between plus-or-minus five percent than those businesses that rely on static planning.
However, moving from static financial planning to active planning needs a considered approach to ensure all data is captured. The first step is to implement a trusted, cloud-based financial solution that makes a single source of shared data accessible through a secure interface to all relevant stakeholders.
Centralising financial data on one platform encourages active planning through greater collaboration across the organisation, by making data more accessible to senior executives from other areas of the business so they can incorporate financial information into their planning. It also allows other departments to share valuable non-financial data with the finance team through the centralised platform. This approach starts to break down traditional workplace silos, as everyone becomes accustomed to using the new platform. From there, executives and managers across the organisation can build a culture of data insight and foresight with their broader teams, providing a larger foundation of business support for the data.
This helps the organisation as a whole to more effectively harness its data and achieve more thorough business and market insights that support effective business decision making. Ultimately, meaningful data insights lead to better business decisions that drive more successful business outcomes.
Effectively integrating financial and non-financial information enables organisations to truly capitalise on data as a competitive asset. For example, through a user-friendly online dashboard, business users can access multiple data sets and automatically incorporate them into budget planning and analysis, project planning, and rolling forecasts in real time.
In a project planning scenario, real-time data can be accessed and incorporated through the dashboard, even when multiple users are adding and updating data at the same time. This helps finance teams to effectively link non-financial metrics to financial performance and gain real-time insights into the project’s performance and its contribution to the organisation. The finance team can also set cross-organisation parameters for data input that allow business users to access and share data that is categorised to align with the overarching business strategy. The result is a company that makes informed, strategic decisions driven by data.
Due to the need for organisations to become more agile in the face of new market threats and opportunities, the role of the CFO will continue to grow as a strategic partner in business planning and operations. CFOs and organisations need to move from siloed planning that limits insights to only financial data, toward planning that consolidates both financial and non-financial data and analysis in real time.
The resilience and competitiveness of organisations depend on their ability to collaborate effectively with internal and external partners, and capitalise on data for accurate and timely business insights.
To learn more about giving meaningful context to your data, and how to become a digital accelerator to improve the competitiveness of your organisation, read our white paper Building a business case for finance digital transformation, or contact the Tridant team today.