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.