Finance’s Role in Managing the Ever-Growing Volume, Variety & Velocity of Data
The use of digital technology has proven to be an effective way of managing complexity and increasing corporate agility -- which explains why companies are increasing their investments in this area almost without exception. The CFO’s pivotal position at the intersection of finance, technology, and strategy makes him or her uniquely placed to help the organization unlock the value of the digital revolution and maximize its benefits.
But there is a catch: This digital revolution is also driving exponential growth in the volume, variety, and velocity of data. And many organizations, saddled with deep silos of inconsistently defined and structured data, lack the combination of big data processing and enterprise analytics capabilities that would help them realize its full potential.
This precise issue was highlighted in Accenture’s "2014 High Performance Finance Study," which surveyed more than 600 senior finance executives across 10 industries. The report, "The CFO as Architect of Business Value: Delivering Growth and Managing Complexity," showed without question that the vast majority of organizations are not yet harnessing the full power of today’s technology. In fact, just 4% of organizations surveyed have fully deployed big data and enterprise analytics capabilities to date, while more than half of respondent organizations (53%) are still focused on using data to explain what has already happened, rather than making future projections.
Thankfully, our research suggests that CFOs and the finance function are stepping in to help guide the organization in making the most of the technology they have today and the investments they are planning for tomorrow. For example, the study shows that in recent years, CFOs have been able to deepen their understanding of data, and as a result there has been a drop in CFOs reporting that big data and analytics are having a large impact on the performance of the organization over the last two years -- falling from 40% to 34%.
This issue highlights another important finding of the study. The focus of today’s CFOs reaches far beyond finance, budgeting, accounting, and compliance. Their strategic influence is expanding rapidly and their success within their own function has propelled them into a starring role across the business. Indeed, as many companies struggle to realize the digital revolution’s potential to create competitive advantage for the enterprise, technology looms large on the CFO’s future agenda. For example, 86% of CFOs are driving decision-making or providing input in guiding, prioritizing, and managing technology investment decisions. Meanwhile, 37% are taking a leadership role in monitoring the return on the investment of new technology.
While many organizations are planning to invest heavily in digital technologies over the next two years, CFOs are most concerned with extracting information from the raw data and deriving insights from it to act upon. To that point, our research shows that more than one quarter of finance executives are planning to increase investments in big data and analytics by more than 25%. Furthermore, 20% of survey respondents say that in two years' time, they expect to have fully deployed the technology and processes that will help them cope with processing large volumes of data.
CFO and CIO: A critical partnership
As finance chiefs play an increasing role in company-wide technology investment decisions, it will be critically important to maintain high levels of collaboration with the CIO if there is any hope of successfully converting “noise” into actionable insights for the business. CFOs have significantly deepened their understanding of technology, but they still need CIOs and their teams to evaluate, prioritize, implement, and operate the technology solutions to support the business. And they, in turn, must ensure that the CIO truly understands the issues the organization is facing so that the solutions adequately address the threats and opportunities.
When it comes to big data and analytics, CIOs can and should be helping the CFO to analyze available information and apply the insights it yields to the business to create value. Moreover, because the needs of the organization can change rapidly and unexpectedly, it’s essential that these two executives maintain an open dialog throughout this process so that organizations are collecting the right information, analyzing it in a way that takes into account the business landscape, and applying it so as to deliver value.
Today’s CFOs are increasingly digitally literate, not only within their own function, but also across the enterprise. A few, in fact, are already in the digital driver’s seat -- leading enterprise-wide efforts to spread the benefits of the digital revolution across business functions. As more of them enhance their strategic position, their involvement in digital technology decision-making can be expected to grow -- a decision that is likely to reap great rewards for the organization as a whole.Scott Brennan is managing director of Accenture Strategy's Finance & Enterprise Performance group. Mr. Brennan's experience is in leading finance transformation programs, Enterprise Performance management programs, planning, budgeting, forecasting, and financial reporting, ... View Full Bio