Many organizations recognize the value in harvesting data, whether the information is about customers’ buying habits or workers’ performance measures. But some of those companies haven’t been able to tap into the full potential of business intelligence, i.e., getting the right information from the data to make better business decisions.
Donny Shimamoto, CPA/CITP, CGMA, believes finance should own the business intelligence role—for the good of accountants and the good of the organization.
Here are three reasons finance should take over business intelligence, according to Shimamoto, founder of IT consulting firm Intraprise TechKnowlogies, who presented at the AICPA Financial Planning & Analysis Conference this week in Las Vegas:
- Information is everywhere, but it often lacks relevance, clarity, and accuracy: Surveys bear this out. Twenty-eight percent of senior finance executives said they had little or no information to predict the performance of their business in 2013, and another 54% said they had only half the information needed to provide visibility into performance, according to a recent Accenture survey. A recent Gartner report says that businesses are “still struggling to make progress with [business intelligence] and analytics.”
- Confidence about information is high when it comes from accountants: Satisfaction is lower regarding information supplied by some other departments. “The role of the accountant as a purveyor of truth and as an attester to the quality of the information has become increasingly important,” Shimamoto said.
- The rise in analytics represents an opportunity for finance to shift toward a role of business partner: The finance function has earned trust, but more for the role of watchdog and less for analytical insight. Accountants “can go beyond traditional cost control and start to evolve the role to be looking at the organization as a whole and discussing how to best optimize the performance,” Shimamoto says.
In his presentation, Shimamoto broke down the role of accountants into four quadrants. The top left is the most traditional—the steward/controller role, which is primarily for reporting and transaction processing. The trusted reporter role, the lower-left quadrant, encompasses duties such as Sarbanes-Oxley compliance, IFRS, and GAAP.
The third role, the lower-right quadrant, shifts into more technical expertise. “These are people that are really strong in supporting specific functions,” Shimamoto said. “They might have industry expertise or experience in activity-based costing or treasury management.”
The fourth role, in the top-right quadrant, is the one to which Shimamoto hopes finance can ascend. “Finance is the key to help unlock the power of business intelligence,” he said.
Traditionally, if others didn’t speak the language of IT, they were hesitant to learn. That hesitance is one reason accountants haven’t gotten as involved in the application of business intelligence to company decisions.
Accountants today don’t need to fret about learning business intelligence thanks to an improvement in BI tools, Shimamoto says. “The tools have evolved to become so user-friendly that you don’t need IT to help get the information,” he said. “It’s evolved now so finance can do it all on [its] own. That’s a huge change within the last decade.”
If accountants are willing to escape their comfort zone, they can move out of those left quadrants and into a more strategic position in their companies, Shimamoto said.
“We’re seeing where management accountants are already used to reporting on information on a regular basis,” Shimamoto said. “Now as we’re looking at overall integrated reporting, reporting on sustainability, reporting on ethics, all are now coming into greater importance and increased focus. So as organizations are capturing data on all these additional topics, that’s where the skills that finance has can start to be applied.”
—Neil Amato (firstname.lastname@example.org) is a JofA senior editor.