How Strategic CFOs Are Harnessing Real-Time Data

It hasn’t been too many years since a CFO’s job mostly consisted of reading balance sheets and running a company’s finance department. But technological advancements in communications and data management have changed everything.

Today’s strategic CFOs are harnessing real-time data, and in doing so, they’re connecting the dots between customers, key indicators, revenue and the company’s financial performance. These activities drive business strategy and communicate performance to investors and other stakeholders.

How are today’s strategic CFOs accomplishing all of this?

 

Detecting Patterns and Making Predictions

Before the age of real-time data, CFOs had to provide financial advice to business executives based on historical information. While this historical information was better than no information at all, it didn’t account for current market trends and economic conditions.

Today, strategic CFOs are using real-time financial data to detect patterns and even predict consumer and investor behaviour. Lead indicators can help CFOs to identify risk and make up-to-the-moment predictions that help decision makers to avoid pitfalls and capitalise on opportunities.

 

Picking Out the Right Signals

One of the dangers of the age of real-time data is that there is so much information available that it’s easy to drown in all the noise and ignore the signals that really matter. In order to be effective, CFOs have to use intelligent, analytical solutions that correlate external events to internal revenue trends. This allows them to tell the difference between distracting information and information that can reduce risk.

 

Protecting Company Data

With more and more financial information available to the world at large, cybersecurity is a growing issue in the business world.

 

 

Data breaches can be extremely costly and can threaten businesses of any size. One 2015 study found that the average cost of a data breach was $3.79 million. CFOs know that this kind of a hit can jeopardise any business. Most CFOs work with their IT departments to develop strategies for protecting the day-to-day security of their companies’ data.

 

Integrating Data

Many CFOs have been embracing an integrated data model to develop new processes in the way data is gathered, aggregated, reported, shared and analysed. This must be done quickly if the real-time data is going to be used efficiently and strategically. Fortunately, with instant communication, many CFOs are finding that they can encourage smarter decision-making by using an integrated data approach.

 

Keeping Everyone Connected

Thanks to cloud accounting systems, companies of all sizes are increasing the frequency with which they access and share their data. When key players are all aware of important metrics, they can be guided toward achieving overarching goals and sustaining performance.

Real-time data is making it less risky to have different divisions, business units, and individuals operating in diverse geographic locations around the world. They can all be kept up to date on important developments and key indicators. By sharing important data with everyone at once, CFOs can more easily steer their company’s financial ship, keeping everyone informed and working toward a common goal at the same time.

 

Using Predictive Models

CFOs have always developed forecasts to help their companies plan for the future, but real-time data has introduced predictive models to the mix. By using advanced analytics, CFOs are learning to enable greater efficiencies, agility, and strategic insights.

Advanced analytics help CFOs to hedge against volatility and respond faster to changing market conditions in pricing, the supply chain, and other areas. By watching the real-time trends, CFOs can help their companies to prepare for coming changes.

Because real-time data and analytics are still relatively new, CFOs will continue to innovate how they use them to benefit their companies. If you’re hoping to harness real-time data to help you with your business, or if you’re in need of the services offered by CFOs, get in touch with us at Altus Financial.

To learn more about how an outsourced CFO can steer your business to future growth, download our CFO Services eGuide below: