Key skills for data analytics and financial decision making

The evolution of financial analytics has created the need for a new set of skills. As organisations upgrade their workforce across different functions, including finance, a reasonable demand for analytical and relationship skills has arisen. Once considered so-called ‘soft skills’, people/interpersonal skills are now a top priority for companies set on creating an analytics culture for financial improvement.

Let’s look at some of the essentials.

• Leadership: Organisational leadership should have a sharp view of the future and a clear road map for achieving goals and objectives.
• Culture: An innovative culture coupled with room for experimentation and adaptability is a necessity.
• New skills: Technology savviness combined with acute business understanding, will enable the finance function to manage its transformation and digital journey.
• Engagement: An opportunity to learn, grow and innovate through engagement and collaboration.

Organisational structuring and skills

Reimagining the finance workforce in the face of new technology and digital transformation requires organisational leadership to re-think and structure new roles. Finance transformation and the associated skills development should enable organisations to adopt an agile structure to share expertise where it’s most needed.

Consider the following structure of an agile organisation from McKinsey before we look at each of the four key roles in more detail.

Source: McKinsey [1]

• Core team: A small team of finance professionals would be responsible for transactional processes—eg invoice-to-pay revenue management. Most of these activities would be automated and standardised and would therefore be managed by a smaller group of people.
• Problem-solvers: Problem-solvers include finance professionals who could be assigned at short notice to different business functions to address specific financial challenges. (Senior finance leaders should track the performance of problem solvers to ensure that they focus on the most important business questions and parts of the business.)
• Specialists: These are finance professionals with deep technical and analytical skills. They focus on financial performance aspects—eg customer and revenue analytics, liquidity, working capital management, and so on. Specialists are usually organised into centres of excellence (COE) and focus on an aspect of financial performance (eg revenue analytics).
• Value leaders: Highly skilled finance leaders function in four professional groups to tackle the most pressing business challenges. Their focus is on the most important business opportunities within the organisation. The leaders of these cells have demonstrated distinct finance capabilities in financial and business acumen, collaboration and problem-solving.

Organisations need to develop digital finance capabilities using different approaches, which could be either formal or informal. There are three key pillars organisations should consider.

1. Skills should be clearly defined and assessed regularly

You can use a skill/competency matrix to define basic, intermediate and advanced skills. There should be regular discussions between managers and employees on skill-development goals and progress, and organisations should adopt transparent and well-thought-out skill assessment and feedback processes.

Read: Five free skills matrix templates and samples [2]

2. Formal avenues for skill development

Organisations should invest in either internal or external finance academies and tie promotions to formal training and skills development (eg attain intermediate to advanced skills X, Y, and Z to move from team leader to team manager). Training solutions could be provided face-to-face, online or via blended learning experiences (ie both face-to-face and online).

3. Informal support for skill development

Finance leaders should focus on promoting a percentage of the finance team into leadership positions over time. In support of this, the rewards and benefits system for managers should foster skills development by coaching team members.

Which do you think is a better starting point to become a finance professional into the future: someone with strong financial knowledge who can then develop their ‘enterprise’ skills (eg decision-making, prioritising, strategic thinking, commercial awareness), or someone with strong enterprise skills who can then develop their financial skills?

References

[1] New technology, new rules: Reimagining the modern finance workforce [Internet]. McKinsey; 2018, Nov. Available from: https://www.mckinsey.com/business-functions/operations/our-insights/new-technology-new-rules-reimagining-the-modern-finance-workforce

[2] Five free skills matrix templates and samples [Internet]. AG5; 2019 Jan 15. Available from: https://www.ag5.com/free-skills-matrix-templates/