Senior financial professionals consider big data their greatest
challenge to accurate forecasting, according to the 2013 AFP
Risk Survey, sponsored by Oliver Wyman, to be released on
February 27.
Big data refers to the challenge that organizations face in
capturing, managing and processing tremendous amounts of data
within an actionable timeframe. While organizations acquire and
generate this information, it is not clear how and whether their
data is delivering the business insights needed to develop a sustainable competitive advantage.
Our analysis-summarized in a forthcoming report on how financial
professionals manage risk and forecast key metrics in an
increasingly challenging operating environment-shows that more than
half of survey respondents (52 percent) consider capturing relevant
data within the company as their main impediment to forecasting.
This is closely followed by integrating risk and forecasting data
into strategic decision making (47 percent) as well as capturing
relevant data from external (non-company) sources (44 percent). Far
fewer survey respondents cite executive management support,
information technology resources, or talent shortages as
significant impediments.
The challenge of extracting actionable business insights from
big data increases with the scale and complexity of the firm. Data
capture is a greater challenge to effective forecasting for more
than 60 percent of large organizations and publicly traded
companies.
As effectively managing uncertainty increasingly impacts
corporate performance, the ability to incorporate relevant data and
analytics into forecasts is becoming a critical capability for
companies to continue to develop. The organizations that are able
to quickly and accurately analyze the implications of information
will create a significant, long-term competitive
advantage.