Finance data management...
...or Why all FP&A Roads go to Data management.
Even if for the last six years I have been specializing in Data management, I still follow (thanks to the FP&A club) developments in the FP&A area. While reading some publications on FP&A trends, I realized the strong connection between FP&A and Data management topics. So I decided to share with you some of my observations and experiences.
Let’s start with the notable trend of FP&A becoming a business partner (Source)
In the FP&A world, among others, it is interpreted as being a trusted advisor to decision-makers on both strategic and operational levels.
Where in the world of Data management do we meet ‘decision makers’? The expression "an organization is data-driven" is quite popular these days. It can, though, evoke some debate within professional circles.
I can briefly summarize it as the following:
- Put data at the center of the decision-making processes
- Give decision-makers access to data they need and when they need it
- Allow decision-makers to ask questions and receive answers that are based on data before the decisions are made
- Implement a business governance model within an organization that will enable a data-driven decision-management model
How can the organization become data-driven? At least several strategies to be implemented by management:
- Transformation of the organizational structure and culture so that the data and models actually yield better decision
- Identification and management of multiple sources of data
- Development of data management capabilities to realize the two strategies mentioned above
So, your road map for becoming a trusted advisor is sketched.
The next topic is FP&A's role in managing the company's value
FP&A managers have a lot of different responsibilities in the area. Company valuation is focused on determining the present value of an asset. What has Data management to do with it?
The ‘Bible’ of DM professionals, the DAMA-DMBOK standard, stipulates one of the Data management guiding principles as "Data and information are valuable enterprise assets."
So, the conclusion seems simple: if you, as an FP&A expert, manage a company's value, you are also responsible for managing its data and information.
What do we mean by labeling data as an asset? One of the most practical explanations is that data is used as such to make smarter business decisions that allow companies to become more profitable and/or reduce their potential for risk in regard to how they operate.
But what is expected from you as an FP&A guru with respect to Data management?
The answers are hidden in the DAMA standards mentioned above, and we are still on our way to them.
What are your functions as an FP&A expert**, and how are they linked to Data management?
If you think about Strategic Planning and Forecasting, then your thoughts turn to DWH and BI tooling and Predictive analytics, which are unambiguously Data management functional areas.
If you keep yourself busy with Performance metrics, Trends, Scenarios, Reports, and Analysis, you instantly need correct historical data, at the right time, at the right place, of adequate scope, and of acceptable quality. These are your requirements for data that is to be delivered to you. Execution of these requirements is a part of the mature Data management function within your organization.
If your responsibilities are extended to Core processes, Enabling Technologies, and Standardization, then you definitely need to be familiar with Business processes, and Data flows, Data and Application architecture, Data distribution principles.
So, you see that unavoidably ‘all roads go to Data management.
This article only touched the tip of the iceberg, outlining your main concerns in the Data management area. We all know that "the devil in the details."
The question remains: how do we enforce you with practical knowledge and tooling to let you successfully perform as a Trusted Advisor and Business partner?
Note: this article has also been published on FP&A Trends, 13/12/2016. Link to the article.
For more information, visit our Data Crossroads Academy site: //academy.datacrossroads.nl/courses/how-to-bring-data-management-into-finance-practices/lesson/data-management-fundamentals-for-finance/
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