In this blog, we share highlights from the second of our autumn FD Think Tank dinners, which explored the question: “In a world of abundant data, how do you focus on what matters?”
The three themes to emerge from the evening’s discussion were:
- The difficulty of drawing insight from data
- How systems can support and hinder organisations
- The role of technology and Artificial Intelligence (AI)
The difficulty of drawing insight from data
As the well-cited statistic states, “90% of the data in the world today has been created in the last two years”. The proliferation of data is only growing and the horizons of what can be measured and captured continue to expand. This presents a few key challenges: how to make use of the data and how to know if you can trust it.
As more data becomes available, there is a temptation to include it in the board pack. But is this extra detail helpful or does the expanding volume cloud the message and insight? Asking what decision the board can now make with this data and whether the extra insight is materially valuable will help establish what is worth including and what’s better left out.
Big data presents both a blessing and a curse. It can help to provide new insight and throw light on previously immeasurable issues, but it can also be difficult to pair with the traditional information produced, for example by your finance system, and its accuracy can be dubious. As one director put it, “Are we going to include it in a regulatory submission? No chance!”.
How systems can support and hinder organisations
The variety and relationships between data points requires systems to adapt to the changes in how companies interact with their customers and suppliers. Instead of aiming for a single warehouse where all data is collected and stored, organisations are increasingly moving towards more pragmatic data pools - disaggregated repositories that can be linked together to form the whole picture.
Flexibility is required to incorporate new technologies and one of the biggest challenges facing large organisations is keeping their technology up-to-date in an efficient way. This isn’t a problem that new start-ups face at present, but it is one they will face in future as the rate of technological change accelerates.
The role of technology and Artificial Intelligence
New technologies can help to drive organisations – increasing efficiency and giving insight. The future evolution of AI in particular gives a huge range of possibilities for management to analyse and respond to their data.
With regards to board composition, could there be a role for an AI board director in the future? Possibly not, but management should take every advantage that the AI provides to help them spot trends and unusual aspects of performance. But it shouldn’t, however, use AI for the sake of it. New technologies should only be employed to support a business case – for instance, to help make the organisation more efficient – not because they’re fashionable.
If you would like to challenge the board status quo, and stimulate fresh thinking around good governance, visit our Think Tank page and request an invitation to our next event.
