As a CFO, you know the importance of FP&A teams driving intelligent business decisions. But how can they do so without access to the data they need?
This is why data democratization in your organization is essential for FP&A teams looking to make strategic choices that move the needle. With access to timely and accurate insights, your team will be able to take advantage of opportunities quickly and efficiently.
On the flip side, your FP&A team will benefit from no longer having to be the gatekeepers of the majority of your org’s financial data.
In this blog post, we’ll look at why and how data democratization can improve the flow of decisions across your entire organization.
What is data democratization?
Data democratization is the practice of providing equitable access to data for any team member or stakeholder, regardless of their job title or technical skills. It enables anyone to access, analyze and utilize data to gain insights quickly and efficiently without relying on IT teams or a few skilled individuals.
Data democratization is the key to unlocking powerful insights quickly and efficiently.
It ensures FP&A teams have fast, reliable access to all of the data they need - no gatekeepers or bureaucracy required. And it goes both ways, allowing FP&A teams to encourage self-serve access to financial data where appropriate.
What role does FP&A play in better access to financial data?
Your FP&A team helps the company accurately assess the current financial position, identify significant trends and patterns within their data, and make informed decisions based on their findings.
Through FP&A, your organization gains deeper insight into how decisions are impacting their overall financial performance, allowing them to better manage risk and ensure they remain financially secure.
Why is data democratization crucial for FP&A teams?
FP&A teams need access to accurate data in real-time, to help inform decisions that influence organization-wide strategy.
With a 360-degree view of data, your team (as well as external stakeholders) can gain a more comprehensive understanding of financial performance and identify any untapped opportunities or potential risks.
By leading the transformation to democratize data, FP&A teams can stay on top of relevant market changes and react quickly with tailored strategies, investments and adjustments. This ability to harness timely insights leads to better collaboration across functions.
Data democratization allows key stakeholders to have a better understanding of the organization's financial situation. By making financial data accessible to all team members, each person can see the same information and draw their conclusions, leading to a shared understanding of the company's finances.
When everyone has access to the same financial data, they can collaborate more effectively, identify trends and insights that might otherwise have gone unnoticed, and contribute to more informed decision-making processes. This results in more robust and comprehensive analyses, which ultimately leads to better decision-making.
Faster decision making
When financial data is siloed or not easily accessible, it can take a long time to gather and analyze the information needed to make informed decisions. By democratizing financial data, FP&A teams can make decisions more quickly, allowing the organization to be more responsive to changes in the market or other factors that may impact the business.
How to implement data democratization at your organization
Implementing data democratization in your organization can seem daunting, but with the right approach, it can be a smooth and beneficial process. Here are a few steps you can take to ensure successful implementation:
Assess your current data accessibility
Before making any changes, you need to understand how your data is currently accessed and shared within the organization. This involves identifying who has access to what data and how it's currently being used. This will help you identify any gaps or barriers that may exist and develop a plan to address them.
Identify the data you want to democratize
To maximize the benefits of data democratization for FP&A teams, it's best to start by providing access to the most critical data sets that directly impact key business decisions. Once teams are leveraging those essential insights, other data sets can be opened up as needed to provide a more holistic view of financials and operations.
Develop a plan for democratization
Here are a few steps to ensure a successful implementation.
- Define who will have access to the data and at what level
- Determine the appropriate tools and technologies needed to ensure the data is accessible to everyone who needs it
- Establish protocols for how the data will be used, shared, and updated
- Establish data governance policies to ensure the data is accurate, secure, and consistent across the organization
Train your team
Training should cover the following:
- The new data accessibility protocols
- The tools and technologies that will be used to access the data
- The data governance policies
- The importance of data sharing and collaboration
Monitor and evaluate
It's essential to monitor and evaluate the success of your data democratization efforts regularly to ensure that they are achieving their intended benefits. This involves establishing clear metrics for success and regularly measuring progress against those metrics. Here are a few examples of metrics you might use:
- User adoption rates: Track how many users are accessing the data and how frequently they're using it. Low adoption rates may indicate that the data is not meeting users' needs.
- Data quality: Regularly assess the quality of the data to ensure that it's accurate, complete, and up-to-date. Poor data quality can undermine the credibility of the data and lead to poor decision-making.
- Collaboration: Measure the degree to which data democratization is fostering collaboration between team members. This can be assessed through surveys or by tracking collaboration metrics within the tools used to access the data.
- Decision-making speed: Monitor how quickly decisions are being made now that the data is more accessible. If decision-making is not happening more quickly, you may need to make adjustments to your data democratization plan.
By monitoring these metrics regularly, you can identify any issues that arise and make necessary adjustments to your data democratization plan.
For example, if adoption rates are low, you may need to re-evaluate the data sets you've chosen to democratize or consider training programs to help users better understand how to access and use the data.
Similarly, if data quality is poor, you may need to adjust your data governance policies or invest in better data cleaning tools.
Implementing data democratization can be a game-changer for your FP&A team, providing increased transparency, improved collaboration, and faster decision-making. By following these steps, you can ensure a smooth and successful implementation that benefits your entire organization.