By Joe DosSantos, Chief Data Officer, Qlik
If you look at adverts for jobs in finance, the majority state “an ability to work with numbers” or “enjoy working with numbers” as a prerequisite for applicants. It’s understandable, therefore, to assume that people working in finance and accounting would also have a certain level of data literacy – the ability to read, work with, analyze and communicate with data.
So, you might be surprised to learn that data literacy amongst the finance function is not as widespread as it should be, particularly when you consider how much of the role interacts with data. Yes, finance teams are adept at reporting on data but taking informed action using the insights data can provide is a very different skill.
Did you know that many finance teams still rely on spreadsheets to analyse data, spending about 80% of their time manually extracting and prepping data and only 20% analysing it?
With the increased digitisation of businesses and consequently finance, this balance needs to start tipping the other way from a passive to an active relationship with data.
The shift is already starting to take place. Our latest research shows that three quarters of those working in the finance department regularly review and use data to inform decisions about what action to take, and over two thirds (69%) believe data literacy will help them stay relevant in their role with the growing use of technology. But finance teams are lacking the training to prepare them for a more data-oriented and automated workplace.
How can organisations close the gap between the disparity that data offers, and the investment needed to make sure teams have the data literacy skills to fulfil it?
From gut feel to data-led insight
The role that finance plays within a business has evolved beyond dependence on historical data and static quarterly and yearly forecasts to become a team that helps drive efficiencies and insights into business performance, and measures and improves returns on digital investments and business bets.
This evolved role requires Active Intelligence – the ability to deliver up-to-date information designed to trigger immediate actions when they matter most. With it finance teams can accurately compare forecasting with actuals in real-time for ongoing trend analysis or set up thresholds and alerts for in-the-moment monitoring of spend to avoid budget derail and compel action.
This is where finance teams should be. Instead, 59% say that they still frequently make decisions based on gut feel, rather than data-led insight. For finance teams and consequently their employer to thrive, more investment needs to be made in increasing data literacy.
Building a data-literate finance function
Increasing the data literacy of finance teams is not an overnight job. That said, one of the hardest parts of any big change is buy in from employees and thankfully they’re on-board. Sixty-nine percent would like to become more data literate, with 74% saying it is necessary to fulfil their current job role.
The big issue is that only 34% have had formal data literacy training with hands-on exercises and only 31% have had access to self-service e-learning platforms with data literacy modules. To make the most of the advantages that an active relationship with data can offer, businesses need to equip their finance team with the knowledge and skills to work with data effectively – to feel empowered by data to drive decisions and help their organisation become truly data driven.
They also need to create a culture that supports employees to develop non-technical skills like curiosity, creativity and collaboration to gain different perspectives and challenge assumptions about the data. And give them opportunities to put what they’ve learnt into practice. This is important not just for now but also for the future. As seventy percent of those working in the finance and accounting believe that data literacy will help them be more successful in their career and open up more professional opportunities (69%).
Going beyond simply numbers
To be one of the success stories, organizations need to prepare their finance teams now by giving them the skills to go beyond just numbers to a relationship with data that is far more collaborative, creative, and impactful.
As Faith Vakil, director of research, Gartner Finance highlighted recently – “the pandemic exposed budgeting and forecasting processes that were not able to handle rapid and unpredictable changes in operating conditions”. Leaders that recognize the potential of data literacy both from a business perspective and in retaining increasingly hard-to-come-by talent will find themselves in a far better position to thrive in whatever challenges they meet in today’s uncertain economy.