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The Top 5 Data Challenges Facing Finance Teams in 2020

August 27, 2020 |

Data drives modern business. It provides a foundation of information that lets your finance team look back at what your organization has already done, better understand what’s happening in the moment and see forward into what’s ahead. In doing so, it allows you to analyze what’s working and to understand what’s not.

So what happens when your data becomes a hindrance rather than a help?

Whether you’re having problems sourcing the right data or converting it into useful insights, spending too much time organizing data or haven’t built the right technology infrastructure around it, data challenges can lead to greater issues across your finance team, making it hard for you to deliver value to the organization as a whole. And that can have a negative impact on your business, leading to weak insights, untimely reporting, failed processes and decreased productivity. All of which are hard to compensate for during times of change when you require as much visibility as possible to build the right strategy to thrive.

In the recently released Vena Q2-2020 Industry Benchmark Report, we asked 350 business leaders and finance and operations professionals from across industries and around the globe to identify their biggest data challenges. Here’s what we found—listed in order of most challenging to least:

  1. Multiple disparate and disconnected data
  2. Too much time wrangling data
  3. Getting meaningful and actionable insights
  4. Lack of data expertise
  5. Too much data

Consider each in turn.

Challenge #1: Multiple disparate and disconnected data

Multiple disparate and disconnected data was the most common data challenge for organizations, as revealed in our benchmark report. Identified by 57% of respondents as a challenge, it’s proof that data is only good to you if you can get to it and use it in a meaningful way.

This means connecting data that comes in different formats and from different data sources to create a unified view and one single version of the truth. From there, you can then draw on it to build your business processes, fuel data-driven storytelling and navigate your business through change. It will also help you make decisions on an ad hoc basis and react with agility at every step. This is where the right technology comes in as well, connecting data and putting it at your fingertips so you can begin to extract true insight and even create a framework for tools such as machine learning and AI.

Challenge #2: Too much time wrangling data

The second biggest data challenge among survey respondents? The amount of time spent wrangling data. Of the organizations surveyed, 51.5% named this as an issue.

And it’s no wonder. Manually gathering, selecting, cleaning and organizing data so that you can turn it into actionable insights can be an unruly and time-consuming process. Again, here’s where aligning data across disparate data sources and creating a single source of truth makes that data easier to access so that it’s fully transparent and easier to put to use. It's also a critical step in getting true value from your data by removing any barriers so that you’re able to get to those insights faster, increase the agility of your planning process and better prepare for change.

Challenge #3: Getting meaningful and actionable insights

Raw and clean data means nothing if you can’t turn it into meaningful and actionable insights. Yet 48.5% of organizations have issues doing exactly that. That means almost half of businesses aren’t using data to its fullest potential to enable the strategic information needed to drive data-driven decision making and plan for today and tomorrow.

To drive strategic growth within organizations, finance teams can draw on technology to access information needed. The right business intelligence tools will turn that data into actionable insights in order to build and support data-driven decision making. By doing so, you can bring in processes that will lead to better strategy and growth, so that you leverage your data to feed insights and drive efficient and productive processes that align with your organization’s greater strategy and goals.

Challenge #4: Lack of data expertise

Accessing data and putting it into action relies on the right technology and processes, but it’s people-driven too. Your people need to be able to create true data-driven processes. And since 41% of organizations named a lack of data expertise as a key challenge, it’s clear many still don’t have that organization-wide knowledge in place. Yet creating a business-wide team of data experts is a key step to organizational agility and success.

Building a data-driven business with organization-wide expertise requires data transparency and the ability to use data easily to write reports, create dashboards and establish a data dictionary that everybody can put into action. To reinforce this, you’ll need ways of visualizing data in a way that will communicate insights and enable strategy and growth.

Challenge #5: Too much data

Is there ever such a thing as too much data? While it wasn’t a challenge for most of our survey respondents, almost a quarter are clearly struggling, with 22% of organizations seeing it as a challenge.

The challenge of too much data, though, can often be a symptom of another issue—inefficient technology, maybe, or the problem of prioritizing data quantity over data quality. It may also be a byproduct of one of the other challenges listed above. But too much data can also be a sign that you don’t have the right people focused on it. In order to keep on top of your data, you need a team that brings a range of skillsets to the table and that’s equipped to organize that data and extract the insights you need. Your team should also collaborate with other departments to put those insights into action and to identify the best metrics and align on them across the business.

If you don’t have executive support to expand your data-driven processes or the team that oversees them, the amount of data you’re trying to coordinate and draw from can of course feel overwhelming. Or maybe there’s pressure from above to expand your data-driven processes without the resources to act on it. Either way, solving the people issue and getting that executive alignment is critical to succeeding and using data to help your organization thrive.

Other Data Challenges

Finally, a small cohort—only 5% of organizations—identified “other” in the list of key data challenges. Identifying what those data problems are will help you create a plan to handle them—and let you evolve your solutions across people, process and technology to overcome your data issues.

After all, in today’s data-driven business environment, data challenges are business challenges—getting in the way of organizational growth and agility. Solving these challenges is critical to building effective strategy and planning processes. It’s also ongoing—just like the data is always changing, how you interact with it may as well, introducing new challenges and ways to optimize your processes along the way. But getting the most out of your data means staying on top of those challenges so that your organization can stay on top of business and market changes too.

Download your free copy of the Vena Q2-2020 Industry Benchmark Report today, or find out more about Vena’s solutions for agile planning and reporting.

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