Read our monthly recap of what’s going on in corporate finance and why it matters to you.
Welcome to the second “Trending in corporate finance” blog of the year. This month, the topics that caught our attention are all about data quality and financial planning systems.
1. Execs are still making big decisions with flawed information
Eighty percent of respondents in a new Chartered Global Management Accountant (CGMA) study that examined the effectiveness of C-level decision-making said they had made a strategic decision using flawed information at least once in the past three years. Organizations have a plethora of data available for decision-making, but many are overwhelmed with the amount of data and struggle to turn it into strategic insight.
Why does it matter?
While external data about the economy and the market always contains some degree of error, the expectation is that internal data is robust and reliable. However, that’s clearly that’s not the case in most organizations—many store their data in disconnected, standalone spreadsheets. In contrast, the CGMA study found that companies with the most effective decision-making processes practice what they called “integrated thinking,” where different parts of the business are able to share and collaborate around the same set of data. That’s exactly how Anaplan customers who have implemented integrated business planning describe the way they now work, with all data stored in a central repository that can be accessed around the enterprise. So as CGMA points out, data quality is a perennial problem, but it can be fixed.
2. Not everything has to be perfect before moving to the cloud
In an article in the Wall Street Journal*, Matt Schwenderman of Deloitte detailed the benefits that technology innovations, such as Anaplan, can bring to the finance function. He also stressed how important it is for finance to be closely involved in the data management and data governance process. But perhaps his most important recommendation was that CFOs should fight the urge to have everything be perfect before flipping the switch on cloud migration.
Why does it matter?
Finance will always want to to change the initial implementation, both to keep models in step with changing accounting standards and to try out new things that can lead to better processes, performance, and insights. In his article, Schwenderman stressed the importance of selecting “nimble” solutions—which, in practice, means steering clear of solutions that need specialist support and require an old-style “waterfall” implementation path and instead choosing solutions such as Anaplan that Finance can manage itself.
That’s all for this month. Don’t forget to check back for next month’s must-reads. In the meantime, feel free to tweet your recommendations to @Anaplan and share your thoughts in the comments below.
*Subscription required for access to article.