Jim Kaitz, President and Chief Executive Officer, AFP
Finance departments must seize the opportunity to drive growth in their organizations by harnessing the power of big data. Finance should own the future of growth and strategy through data analytics. But are we really leveraging the most from big data? How can we maximize the power of analytics to drive growth and shareholder value in our organizations?
Carlos Passi, assistant controller of IBM, says, “By capitalizing on big data using business analytics tools, the role of the CFO is moving beyond optimizing the finance function to transforming the enterprise.”
And, according to Experis Manpower Group, finance “provides the data and analysis that defines an organization’s conversation about value creation with internal and external stakeholders.” Agreed—and without suggesting we all become data scientists, I urge the finance community to keep getting smarter on analytics.
Granted, it may require some overtime for CFOs to keep up with the information bullet train. By some estimates, the volume of worldwide information is growing by 59 percent annually. And Experis labels 90% of data as “unstructured,” which is growing at nearly ten times the rate of structured data.
I’ve talked to companies all over the world, and they all acknowledge there’s a lot of information flowing, and it’s not slowing down. What can CFOs do to harness its potential and provide actionable strategies that drive growth?
Talk to experts (some are right down the hallway). Karen dela Torre, a VP at Oracle, says, “This is a good time for CFOs to huddle with their CIOs to … develop a strategy for managing and leveraging big data for competitive advantage.”
Know what’s at stake. Managing the analytics avalanche means understanding that if you don’t, you’re likely to leave valuable information (i.e., huge profits) on the roadside.
Ensure that your finance and FP&A staffs have the skills to properly interpret, analyze and communicate critical data to business units.
Bill Fusseler, partner of finance, risk and fraud for IBM Global Business Services, said, “Data has become the world’s new natural resource.” His organization conducted a study that found 82% of CFOs see the value of integrating enterprise-wide data, but only 24% think their team is up to the task. One good start is to think seriously about professional FP&A certification.
Like any natural resource, we should be up to the task and harness data to its full potential. As financial leaders, we need to broaden our roles, understanding how finance can capitalize on other critical functions. Analytics is only the beginning.