Navigating Tribal Knowledge: A CFO’s Guide to Clarity
Author: David Silverstrim | | December 14, 2023
Tribal knowledge, often overlooked but widely prevalent within organizations, can pose significant challenges for finance leaders like you. In this blog post, we’ll delve into the concept of tribal knowledge and its specific implications within the finance department and in an organization and propose a strategic solution to address this issue effectively.
Understanding Tribal Knowledge
Before we delve into the depths of tribal knowledge in finance, let’s establish a common understanding. In the corporate world, tribal knowledge refers to information, rules, or processes known and understood by a particular group or department within your organization. Often this knowledge is not documented or shared outside of this group. It’s a hidden treasure chest of insights that, when accessed, can significantly benefit the entire organization. However, it can also be a ticking time bomb if not appropriately managed.
Tribal Knowledge in the Finance Department
In finance, tribal knowledge is perhaps best exemplified by the ubiquitous spreadsheet. Spreadsheets have long been the staple of financial data management. The issue arises when a spreadsheet serves as the exclusive reference point, or its creator is the sole individual with a comprehensive grasp of its intricacies. If this individual departs or is unavailable due to vacation, it can lead to data ambiguity and the potential transmission of incorrect information to management. Further complications arise when sharing the spreadsheet, leading to confusion in managing different versions.
Here are a few common issues that arise:
Dependency on Individuals: If a crucial spreadsheet is maintained by one person, the departure or absence of that individual can lead to chaos. Others may struggle to decipher the spreadsheet’s complexities, increasing the risk of errors.
Data Inconsistency: Maintaining data consistency becomes a significant challenge when different spreadsheets are used across the finance department. This can result in conflicting information and undermine decision-making.
Versioning Confusion: Sharing spreadsheets among team members can quickly become a logistical nightmare. Tracking changes, ensuring everyone is working on the latest version, and managing version history can lead to confusion.
How Automated Financial Systems Reshape Finance Leadership
Finance leaders should consider adopting more automated applications and breaking free from manual dependencies that offer centralized data management, similar to Oracle Cloud Enterprise Performance Management (EPM) solutions. These automated systems streamline financial processes and provide a unified platform for data storage and analysis. By embracing such technology, finance leaders can significantly reduce the reliance on tribal knowledge, enhance data accuracy, and improve decision-making across the organization.
It encompasses strategic modeling, planning and budgeting, financial close and consolidation, reporting, and performance analysis. It is like a unifying force that bridges various facets of an organization’s operations.
The Evolving Role of the CFO
The role of the CFO has been undergoing significant transformation, driven by evolving economic landscapes and technological advancements. Gartner predicts that the next decade will require CFOs to possess higher cognitive functioning, social and emotional intelligence, and technological fluency. They will play a pivotal role in developing new organizational skills and capabilities.
Vision, Efficiency, and Risk Mitigation
Moving from on-premises systems to the cloud resembles the shift from physical libraries to digital repositories. This transition provides several significant advantages:
Vision: Cloud-based solutions provide constant updates and innovations, enabling CFOs to adapt quickly to changing needs. Machine learning algorithms offer valuable insights from diverse datasets, helping uncover hidden trends while having access to a single source of truth.
Efficiency: Cloud solutions streamline processes, reducing the time spent searching for data across multiple systems. This efficiency enables finance teams to focus on broader organizational goals.
Risk Mitigation: Cloud providers prioritize data security and reliability. CFOs can confidently make data-driven decisions, knowing their underlying data is accurate and protected.
Just like embracing cloud-based EPM solutions empowers CFOs to navigate complexity with improved vision, efficiency, and risk management, these systems provide finance leaders with the tools to make informed decisions and drive organizational success. The future of finance lies in the cloud, offering CFOs a promising path forward.
Choosing the Best Technology for Your Organization
Before embarking on an Enterprise Performance Management project, finance leaders must carefully evaluate the technology options available. Oracle offers on-premises and cloud-based EPM solutions, each with unique advantages. Some key considerations include Hyperion Financial Management (HFM), Hyperion Planning, Hyperion Financial Close Management (FCM) for on-premises solutions, and Planning and Budgeting Cloud Service (PBCS), Narrative Reporting (NR), Account Reconciliation Cloud Service (ARCS) and Financial Consolidation and Close Cloud Services (FCCS) for cloud-based alternatives. New players like OneStream and XF are also worth exploring for their all-in-one functionality.
Choosing on-premises and cloud-based solutions should align with your organization’s specific needs, scalability requirements, and IT infrastructure.
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Datavail is an Oracle Partner and a Cloud Excellence Implementer. With a proven track record of helping 500+ organizations navigate the complexities of financial management, Datavail’s team of experts brings a wealth of knowledge and experience to the table. They excel in implementing EPM solutions that centralize data, streamline financial processes, and enhance decision-making capabilities on-premises, in the cloud, or hybrid. Schedule a one-on-one conversation with our Cloud EPM specialists.
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