The last year brought on several critical changes in the way businesses operate, and cloud-based solutions became the norm as organizations rushed to comply with social distancing guidelines and stay-at-home orders. At the same time, CFOs found that the old way of gathering data – passive systems in which data is delivered too late to make accurate decisions – did not suffice. Week- or month-old data may be useful when examining the past, but it cannot inform the present moment, nor can it enable decisions that need to be driven by real-time data.
That’s why the shift from passive to Active Intelligence – a state of continuous intelligence that is current and relevant – is so important. Instead of making decisions based on outdated information, even if it’s only days old in some instances, organizations want to access and make decisions in real-time versus relying on static dashboards or reports. Businesses also need to be able to retrieve relevant insights wherever they are in whatever way is most convenient. This could be in the form of a smartphone alert to, for example, highlight a sudden change in sales in a particular region, allowing the person or team in charge to investigate quickly and take swift action. Others may need to know why their manufacturing facilities aren’t operating at full capacity, why the cost of producing a particular item is increasing, or how many hamburgers to thaw at a ball game when the home team is losing.
In every case, CFOs and their teams need to rely on up-to-date information that’s designed to trigger immediate action to keep up with the speed of business.
Unexpected moments aren’t as surprising with data
It’s true that most businesses do expect the unexpected, but even the best continuity plans are lacking if they aren’t current. Finance leaders must focus on being prepared with the most current data possible in order to act quickly when the least anticipated moments finally occur. Data and analytics are at the heart of those preparations – they empower CFOs to get a closer look at what’s actually going on, and form a stronger plan to overcome what could happen next.
COVID-19 proved to be the epitome of all outliers, but additional black swan events – the Suez Canal blockage and the Texas polar vortex – quickly followed. With a global chip shortage limiting the production of electronic devices and automobiles, and lumber shortages stalling development projects, many businesses have been struggling to keep up. Data can make a significant difference here, providing insight into which divisions or departments are most severely affected by a particular event. For example, an automaker should know which factories have the necessary chips to continue production and which do not. But the only way they are going to have an accurate read – and know how to proceed with their operations – is by utilizing good data that leads intelligent decisions.
Poor information can misguide even data-literate CFOs
Data literacy is one of the most important components of any organization. It is vital not only for executives making high-level decisions but for the entire company; every employee needs to know how to read, write, understand and work with data.
That said, the most data-literate individuals can be led astray – and ultimately make ineffective decisions – if they are working with old or incorrect information. This would be particularly hazardous for CFOs, who are expected to accurately lead businesses through their most challenging financial situations. Traditional, passive business intelligence relies on preconfigured, historical data sets and therefore cannot support the real-time decision-making that's needed in today's complex business environment. With insights based on Active Intelligence – a new paradigm that creates in-the-moment awareness about every aspect of a business – CFOs can make smarter, data-driven decisions that yield superior results.
Accurate, up-to-date data must be the norm
The world is being driven by data, but information alone is not enough to guide CFOs. In a climate of multiple black swan events, the expectation that more will follow and the overall fear of the unknown, organizations cannot sit by and wait for tomorrow. They can take action today and prepare for whatever may come with a real-time data-driven strategy. Finance leaders can do their part to lead in good times and through challenges with accurate, up-to-date information that’s delivered clearly and continuously.