With the economy recovering, getting the most out of business information is more important than ever
CFOs are under increasing pressure to provide better management of information within businesses, and need to invest more in technology to meet these demands.
According to PricewaterhouseCooper's (PWC) 2010 finance effectiveness benchmark study, more than 80 per cent of businesses surveyed are dissatisfied with the quality of their management information.
Whereas compliance was the main concern for finance chiefs before the economic downturn, information management is now considered one of the most important areas of focus.
Through its benchmarking work, PWC has identified a number of obstacles in the way of supplying better quality information.
The first challenge is the collection of the data in the first place. There is a growing demand for non-financial information - partly due to an increase in climate change regulations such as the EU emissions trading scheme - which finance departments are less familiar with.
Sourcing this non-financial data is a new challenge as it is usually held in a number of different places. Just 23 per cent of businesses surveyed said they have access to non-financial and management reporting data from a common source.
The more successful companies in the study consolidate data so finance can apply the necessary controls and processes to allow finance teams to analyse the information effectively. This also saves time in terms of gathering the data.
In order to do this effectively, businesses need to consider investing more into data warehousing and ERP.
According to PWC the next stage for many businesses in this is to move it into what it calls a shared service centre which can be accountable for collecting and analysing data and overcomes the problem of data silos.
Around two-thirds (65 per cent) of businesses in PWC's research have created a shared service centre or consolidated the processing of transactions.
Other challenges around data collection highlighted by PWC, include not enough definition of the requirements for what is being collected, data not being structured in a way to be comparable, along with a lack of adequate tools, processes and skills to manage the collection of data.
And once the information is collected, there is a shortage of staff trained to provide meaningful insight from it. The research showed that many financial analysts spend more time gathering data than analysing it.
CFOs should therefore invest more on training and rewards for staff working on analysing data. The top performing finance departments surveyed by PWC pay an average of 25 per cent more to financial workers involved in "insight activity" compared to other finance functions.
Greater automation of data collection is another way to help provide more meaningful information for senior management, as it allows finance staff to spend more time analysing the information.