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FINAN C I A L D A T A NEEDS T O B E DECIS I O N - R E A D Y by nikolasperrault | Feb 11, 2021 | Blog, Nikolas Perrault, Technology
The one-size- ts-all centralized data governance model has run its course in the nancial industry. There is a need for a more e cient and that serves business better. Governance should be allowed to be distributed to data owners where appropriate, which would help the nance function optimize data to make decisions. Decision-readiness is much better than accuracy and precision because it is a much more consistent and complete process. If nancial data were made decision-ready, nancial governance principles would be adapted for non- nancial performance data. Decision-ready nancial data would bolster trust in internal reports because it would incorporate more intuitive data as well as highly-governed
data. This would also de ne the relationship between nancial and operational data. If nancial data were decision-ready, then it could potentially provide areas that have the most economic bene t with more opportunity to focus on data quality improvements. Today, organizations are creating and utilizing a large and growing amount of transactional, operational, and other enterprise data. Often times, nance will opt for a “single source of truth”, but that’s not enough anymore. While it can be useful at times, especially to organizations that require precision, but it’s not really that useful for decision making. When the data is provided without context or shared with a business in a way that it can’t easily absorb, then it becomes useless. According to research, nance needs more pragmatism and exibility. Finance should deliver comprehensive data faster in order to make decisions, however, this could also take a toll on data accuracy. Instead of a “single source of truth,” nance should opt for a “su cient version of the truth”, which is oftentimes enough. By making informed trade-o s between the cost of bad data and the e ort needed for additional data governance, nance is able to provide a “su cient version of the truth”, which bene ts the business when done correctly and gives them a better outcome. Data needs to be prepared di erently for decision-readiness to be improved. To have a better decision-ready strategy, nance must support distributed data owners with guidelines on which data to govern and the extent of governance as well as e ectively store and protect data. A framework is needed for data quality, drives informed decisions about the trade-o s, and helps to make data governance more scalable. Even if the data isn’t perfect, mutually agreed data quality frameworks will create a shared trust that multiple versions of the truth are good enough to make well informed nancial decisions.
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