Rich Clayton, Vice President of Oracle's Business Analytics Product Group, shared his thoughts on the future of financial analytics during his presentation to Argyle's CFO membership at the 2018 Financial Leadership Forum in San Francisco on February 14. Clayton explained "extreme finance" and how CFOs can leverage machine learning and other data analysis technologies to improve day-to-day operations.
Data analysis technologies are deployed by many CFOs around the world. Yet most CFOs struggle to maximize the value of these technologies.
According to Clayton, an extreme finance approach drives fast, efficient data analysis for CFOs. The approach emphasizes three areas: building smarter businesses, helping businesses work faster and more efficiently and empowering businesses with richer analytics than ever before. With this approach in place, CFOs can deliver actionable insights to multiple business departments, leading to improved decision-making across a company.
Today's CFOs must look beyond financial statements and compliance. In fact, failure to do so may hinder a company's growth.
"Financial statements are great, and compliance is a necessary requirement for finance. But what the business is looking for is more insights and a more forward-thinking commentary to shape [its operations]," Clayton said.
CFOs often have limited time and resources at their disposal. But with the right data analysis technologies in place, CFOs can optimize their budgets, provide meaningful business insights and help companies achieve their immediate and long-term goals.
"Your finance teams are expected to do more with the same or less [resources]," Clayton pointed out. "But are we busy with busywork? And is activity being connected to actual business outcomes?"
Although automation recently has been a key priority for many CFOs, merely automating budgets and other processes is insufficient.
"You need to use data to guide and shape your company."
Conversely, CFOs must find ways to consolidate everyday processes and systems. Thanks to consolidation, CFOs can streamline mundane finance tasks and ensure their companies can realize the full benefits of automation.
"The value of automating the budget process is declining," Clayton noted. "You need to start think about other adjacent processes before you automate a budget or other business tasks."
CFOs also must perform deep data analysis to help their businesses drive revenue growth and boost productivity and efficiency.
The volume of data available to CFOs can be overwhelming. Fortunately, technologies are available to help CFOs revamp their data collection and analysis processes and ensure that CFOs can transform structured and unstructured information into actionable business insights.
"You need to use data to guide and shape your company," Clayton stated. "That may seem like a daunting task … and if you stick to your traditional processes, you won't [be successful]."
In many instances, bias comes into play relative to data analysis.
If a CFO performs data analysis with a hypothesis in mind, for example, this professional may ignore certain data sets. When this happens, the CFO may miss out on actionable insights that otherwise could help his or her business drive innovation and advancement.
Machine learning now enables CFOs to remove potential biases from data analysis. The technology is easy to deploy and helps CFOs simplify, accelerate and enhance data analysis, leading to meaningful results over an extended period of time.
"You need to embrace machine learning to de-bias your decisions," Clayton said. "We tend to use analytics to support a hypothesis. I would challenge you to find data that is not in your hypothesis."
In addition, machine learning can help CFOs establish the right financial metrics.
"Smarter finance means de-biasing our opinions, and de-biasing our opinions will provide us with a better baseline for better predictions and better outcomes."
Machine learning helps CFOs identify patterns and trends hidden within large collections of structured and unstructured data. Then, CFOs can use these insights to establish new business goals to further accelerate a company's growth.
"Smarter finance means de-biasing our opinions, and de-biasing our opinions will provide us with a better baseline for better predictions and better outcomes," Clayton indicated.
Going forward, data science may prove to be essential for CFOs around the globe.
Successful implementation of data science tools requires CFOs to deploy technologies to review comprehensive data sets and eliminate potential biases during the data analysis process. It may require CFOs to create ethics or oversight committees to audit a company's data analysis efforts too.
A data ethics or oversight committee can help a business identify relevant information to achieve the best-possible results. It allows businesses to maintain an unbiased approach to data analysis – helping companies reap the full benefits of data analysis.
"You have to get smarter about data science," Clayton stated. "You have to form an ethics or oversight committee on data, because data and algorithms are going to permeate your organization."
Rich Clayton is Vice President of Business Analytics Product Group and is responsible for the global adoption of Oracle’s Business Intelligence, Big Data Analytics and Enterprise Performance Management solutions. He has a passion for helping companies create value from data and transform their analytical processes. Mr. Clayton is continuously researching industry trends, interacting with customers and partners, and presenting at finance forums, big data events and analytic symposiums around the world on Oracle’s strategy and the future of analytics.
Prior to joining Oracle, he was vice president of product strategy for Hyperion where he we was responsible for go-to-market planning, market strategy, pricing and sales enablement. Mr. Clayton has held several executive marketing positions for venture backed cloud startups. Before joining the technology industry, Rich held various corporate finance roles and was a public auditor with McGladery in Chicago.
Mr. Clayton currently serves on the Board of Regents for Loras College in Dubuque, Iowa. Collaborating with faculty and administration, he founded the Loras College Center for Business Analytics and led the development of the first MBA program in the state of Iowa focusing on business analytics.
Mr. Clayton earned his bachelor's degree in accounting from Loras College.