The Big Idea – how finance leaders are solving the insight problem
Data is the lifeblood of modern business. The ultimate goal for any organization is establishing a trusted source of data as a foundation for maximizing performance. But reaching this goal in the digital world is no simple feat given the amount of data we are now generating. The World Economic Forum estimates that by 2025, the amount of data generated each day will reach 463 exabytes globally, equivalent to one billion gigabytes.
Compounding the data challenge is the fact that 90% of the value created now comes from intangible assets – most of which are not recorded on financial balance sheets – from customer relationships to social to intellectual capital. According to Ocean Tomo in its Intangible Asset Market Value Study, the percentage of intangibles has risen from 17% in 1975 to 90% in 2020, emphasizing what an important area of data management this is for businesses today. Yet obtaining a trusted source of data is harder now than ever before as organizations are having to deal with myriad sources, both inside and outside their networks.
The expectation of today’s CFO has also changed, from maximizing shareholder value from existing operations to becoming architects of new value creation. CFOs need the right data, technology and people to achieve this, so they can anticipate events and drive value. However, traditional ERP systems were built to track value, as opposed to creating it. These legacy systems were not designed to manage the intangible value drivers of the digital economy, and the data that they generate, making it difficult for today’s CFOs to meet these new expectations.
One example of a business that has overcome these challenges is US broadcaster The E.W. Scripps Company. Founded in 1878 as a daily newspaper chain, the company went through a major transformation in 2015, divesting itself of the declining newspaper operation and transitioning to a local television and national media business.
Supporting this transformation was a technology upgrade, aimed at better integration of finance and HR. Scripps digitized its HR operations, with Workday as the foundation. Despite being in the middle of multiple mergers and acquisitions during the technology rollout, the deployment went smoothly and allowed Scripps to more easily reorganize the business after the acquisitions.
Following the smooth rollout and benefits on the HR side, Scripps added Workday Financial Management and Workday Prism Analytics. This offered the firm a unified source of financial and HR data, along with a framework for quickly integrating a new acquisition’s operations and financials – an entire business reorganization can now be done in just two weeks, significantly reducing the lead time to new value creation from the acquisition.
Scripps has been able to remove 32 different system interfaces, making it much easier to access and analyze information. The finance teams are able to spend more time developing analytics, reporting and forecasting dashboards, rather than being tied up on basic finance tasks.
This proved especially important during the COVID-19 pandemic, which resulted in a dive in advertising revenue. With the scenario planning and frequent reporting enabled by Workday Adaptive Planning, the leadership team could make faster and more informed decisions when cash flow was tight, quickly adjusting to new business circumstances.
As Vagelis Kontopos, VP of financial planning and analysis at The E.W. Scripps Company, explains: “Workday has given us the data and insights to better guide the business strategically, especially through tough and uncertain times, and do so much faster.”
Using a common platform across all divisions, Scripps has reduced the monthly reporting time from two days to about 30 seconds, meaning faster and more frequent delivery of real-time reports, forecasts and budget updates to the leadership team.
This is a great example of a business that has shifted from using technology simply to track value to being in a position to find value from its data.
Establishing a trusted source of data is essential to successful value creation. Organizations require their data to be a single-source, accurate, up-to-date version of the truth. Once this is available, they can access crucial insights from their data to improve business performance, including the most profitable revenue drivers, the largest sources of discretionary spend and where to allocate capital to maximize ROI.
Another example is Coleman Worldwide Moving, which added advanced analytics to its technology infrastructure to get more value from its data. Before implementing Workday Prism Analytics, the relocation company was juggling incompatible, disparate systems. With 60 service centers across the US, this made it challenging for users to access relevant data or combine it with external information sources.
The transportation and storage company established a general manager dashboard, which offers a one-stop shop for managers to access key metrics, such as a summary P&L for their location. The dashboard integrates data from Workday Financial Management with additional data sources including Coleman’s billing system and customer satisfaction surveys.
Using our analytics technology, Coleman can run reports for 300 drivers in a matter of minutes – previously this task took up to an hour for just one driver – and has been able to help its drivers become more profitable.
The business now has real-time visibility into financial performance, and the finance team can run reports in a few seconds, speeding up the time taken to view relevant data, make decisions and take action.
In today’s digital economy, companies need to view their data as a mine for creating business value, rather than an asset simply to be tracked. To achieve this, it is vital to establish a trusted source of data, as The E.W. Scripps Company and Coleman Worldwide Moving have shown.
With the right technology, finance can evolve from tracking value to driving it, armed with the necessary insights to predict and proactively respond to events, the adaptability to quickly pivot to capitalize on opportunities, and the talent to support this new remit.
In our next article, we will be exploring how to solve the adaptability problem with flexible and secure processes that support change. Our final article in this Big Ideas series will be overcoming the talent problem by offering offering current and potential staff a modern experience.