12/28/11 PrintArticle | www3.cfo.com

1/2www3.cfo.com/Print/PrintArticle?pageId=081bfdb0-ad5b-4e5d-92ee-3db42dbd398a

IT Value | November 22, 2011 | CFO.com | US

The Data Management ImperativeAs organizations collect ever greater volumes of data, who's going to be responsible for its accuracy and accessibility?Well, who consumes the most data? In most cases, the answer will be (and should be) the CFO.David Rosenbaum

Who’s responsible for the data you need in order to give your organization an accurate snapshot of where it is and how it’sperforming, as well as actionable insight that will help it achieve its goals?This question, and its answer, are critical in today’s increasingly data-rich business environment -- and according toAccenture managing director Paul Boulanger, there is only one right answer.The best CFOs, in the highest-performing financial organizations, own the data they use, and they manage itaggressively.If, for example, an organization hasn’t surrounded something as seemingly geeky and as IT-centric as codingtransactions with a lot of discipline, its CFO can’t compare the cost of goods sold across manufacturing facilities becausehe won’t have comparable numbers. Then, says Boulanger, finance has to do tons of reconciliation to comparedifferences, wasting both time and resources while failing to add value.A new Accenture report released last week -- “Delivering Value in a Complex World,” based on an online survey of morethan 530 senior finance executives and approximately 300 C-level finance customers -- is intended to identify practicesthat differentiate “high performance” finance organizations. Compared with its last comparable survey in 2008, thereport finds that finance is becoming increasingly strategic, aligning better with the C-suite and with business goals, andimproving its capabilities. And, according to the report, one of the key factors that distinguish high-performing financeorganizations is the way data is managed.Boulanger suggests these actions around data management for CFOs who wish to increase their strategic role in theorganization and optimize the finance function:• Seize control. This means limiting the number of people who can manage data structures and hierarchies. “In somecompanies,” Boulanger says, “everyone can make modifications to the data. Companies that have figured it outconsolidate those rights in a team that owns those structures. If someone wants to make a change, it goes through theteam, and that team is not a rubber stamp.” For example, if someone wants to deal with a new vendor, the team has toapprove, and it has to control the vendor code in the chart of accounts. This allows the company to easily and accuratelyassess its spend. “A lot of companies can’t figure out who they spend money on,” says Boulanger, and sometimes differentbusiness units are spending different amounts of money for the same services supplied by the same vendor. (This isespecially true in the software-as-a-service world.)• Consolidate and standardize. Boulanger notes that companies that have grown through acquisition often fail tointegrate fully the data and systems of the acquired entity with their own, frequently balking at the not inconsiderable costof doing so. These companies, asserts Boulanger, “end up with higher personnel and operational costs. “Financialmasters,” Boulanger says, “run their back office real well and work hard to consolidate their data.” Companies thathaven’t standardized their data feeds struggle to consolidate data, and therefore struggle with the close, spending aninordinate amount of finance’s resources on a process that, while necessary, does not drive growth. A lack of ITintegration, he says, frequently points to a broader failure to run an integrated business.Hackett Group financial advisory principal Tom Willman puts it more bluntly: “Some CFOs say, ‘My business is toocomplex to standardize globally.’ Bull. That’s a failure of management.”

12/28/11 PrintArticle | www3.cfo.com

2/2www3.cfo.com/Print/PrintArticle?pageId=081bfdb0-ad5b-4e5d-92ee-3db42dbd398a

Willman points out that the best-performing financial organizations have far fewer applications per $1 billion in revenuethan laggards. “A more fragmented IT architecture leads to more errors,” says Willman. “You’re always asking whosenumbers are right. Why do transformation efforts fail? Weak governance. Weak ownership. Weak training.”Data governance, Willman says, needs to be enterprisewide, not an IT function. “IT builds the tools and architecture,” hesays, “but it can’t tell the business how the data should look. The business must own the data.” That way, he says, theCFO can align reporting around the business’s strategic objectives, as opposed to producing “250-page reporting packagesand hoping leaders can find out what they need.”“CFOs,” advises Boulanger, “need to think expansively and partner with the IT organization to see that the data is undercontrol.”Today, data is the business, and the CFO suite can no longer operate either as a concierge service, offering up data forother functions to interpret, or as a repository where data goes to a sterile death buried in a budget or report.