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It seems that in every industry today, data is the stuff of wild imaginings. Some people envision the creation of secure industry ecosystems, where smart contracts automatically trigger prearranged payments to multiple parties. Others imagine supply chains that match the systematic production of goods to real-time consumer demand. And a few intrepid visionaries posit the development of public company platforms that give investors a daily glimpse of each entity’s financial performance, making the quarterly estimate obsolete.

These varied imaginings are not far-fetched. Data has always been the feedstock of information to make better business decisions. The difference is the ability today to capture, digitize and analyze astoundingly enormous volumes of data. As other innovative technologies — blockchain, artificial intelligence, image recognition software, natural language processing and the cloud — converge with algorithmic-driven data analytics, the ways industries function and business is conducted will be radically different.

A wide open future

This profound convergence is already happening: automotive companies producing autonomous vehicles, retailers identifying and tracking consumer buying habits, manufacturers producing goods via connected smart machines, or financial services firms and media companies respectively sharing data and contracting business within secure blockchain infrastructures.

Much more is in store as computer processing power continues to grow and 5G cellular wireless takes the stage. Greater opportunities exist to capture, transmit and analyze truly massive structured and unstructured data volumes — at ever-more granular levels of detail. At present, 2.5 quintillion bytes of data are produced each day. To get a sense of this size, 2.5 quintillion pennies laid out flat would cover the Earth’s surface five times. By 2025, according to IDC, this figure will increase tenfold.

Imagine the business benefits that will accrue from processing and analyzing this mammoth volume of data. Obviously, more informed and insightful business decisions will be on tap to streamline operations, create products and services finely attuned to buyer needs, and reach consumers in more efficient and frictionless ways.

While many companies accept the need to transform their organizations around data, they’re bogged down by questions like where to start, how much to invest, and who should lead the effort. Put aside these troubling questions and focus instead on the strategic value of data to drive the organization forward, where this data resides, and the accuracy, accessibility and security of this information.

Certainly, someone must lead this revolution, making the strategic and operating decisions on the business benefits of data, along with how and where to generate optimal capital returns. That person is the CFO.

While tension may persist between IT and Finance as to who should lead the organization’s digital and data transformation, the CFO best understands that data is an asset that can be monetized to improve operations, enhance productivity, and align customer experiences with their Amazon-like expectations.

Confronting the need for change

In this journey to generate better business outcomes, CFOs are challenged by legacy technologies, siloed business functions and outdated processes. Other concerns include the accuracy of financial figures, evolving modes of cyberattacks and threat actors, and heightened consumer privacy issues and related compliance risks. Lastly, the blistering pace of technological development cannot be discounted, given the possibility of investing in a soon-to-become outdated solution.

Nevertheless, no one is better equipped to address these challenges than the CFO, given that role’s particularized insights into the organization’s financial performance, which encompasses every aspect of operations, processes and people. Assisted by chief data officers entrusted to develop the analytics and metrics that solve business problems and enhance market opportunities, CFOs can make prudent determinations on which data initiatives to prioritize and capitalize.

The new bedrock of industry and commerce

In making these decisions, CFOs should consider the value of moving the organization’s business and operating data from on-premise servers to the cloud (if this is not yet the case). Over the past 18 months, we have witnessed a remarkable exodus of data to private and even public cloud environments. Aside from such potential benefits as scalability, security, cost-effectiveness and automatic software updates, the cloud presents the means to build the organization around data, giving users more open and flexible access to data for business decisions.

Another CFO decision surrounds the quality of data to confirm accuracy and trust. A solution is to use modern financial and accounting cloud-based applications that provide transparency into the organization’s inbound and outbound flow of capital. Such tools offer a way to rapidly verify the source and accuracy of financial data.

For example, various software products from developer BlackLine automate and standardize the account reconciliation process, driving accuracy in the financial close by validating the accuracy of the balance sheet. Rapid comparisons of the general ledger, bank and other data illuminate possible variances for proper accounting treatment.

Blockchain is an additional means of ensuring trust. Data recorded and stored in a blockchain’s decentralized ledger goes through a rigorous verification process to confirm quality and accuracy. In partnership with Microsoft, Ernst & Young recently launched a blockchain solution for content rights and royalties’ management in the media and entertainment industry.

The new rights and royalties management solution is designed to enable increased trust and transparency between industry players, significantly reduce operational inefficiencies in the rights and royalties management process, and eliminate the need for costly manual reconciliation and partner reviews.

The insurance industry also has plans to use the blockchain, in its case to process automobile insurance claims. Dozens of insurance companies are experimenting with sharing their collective policyholder data on a blockchain platform with each other and third-party entities, such as car repair shops, tow truck companies and state motor vehicle departments. Following a car accident, a series of smart contracts would trigger among the participants, instantly putting the insurance claim process in motion.

Transforming business around data

None of this would be possible without digitization, digitalization and digital transformation — the three steps that companies must take to transform their business around data.

Digitization is the process of converting operating manuals, handbooks, photographs and other business-relevant information into a digital format. Digitalization involves the use of the digitized information to optimize business and operating models to become more productive, efficient and cost effective. These two steps lead the way toward digital transformation, in which the physical and cyber worlds merge, augmenting human tasks with cognitive computing technologies like machine learning and robotic process automation.

Given a future of voluminous increases in data and an accelerating pace of technological development, a “wait and see” attitude among any-sized business will backfire. Early movers will get so far ahead of the competition that followers will struggle to catch up. Now is not the time for wild imaginings. Now is the time for action — for CFOs to don another hat in leading their organization toward digital and data transformation.

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Big data Data and information management Data security Analytics EY