I recently had a fruitful discussion with a panel of CFOs at a conference in Singapore which drew an audience of more than 300 CFOs. The main takeaway was that CFO transformation programmes are best driven by building capabilities to empower the CFO as a strategic business advisor to the Board and CEO. We also addressed the relevance of the predictive nature of planning, big data, and the definition of a "Chief Data Officer" (CDO) role within the CFO office.
Finding useful data
To leverage on the availability of big data for decision-making, analysis should be aligned to business objectives and targeted at where it matters most.
One speaker from the financial services industry related the need to have the right set of data, both internally and externally, including customer wants and competitive data, even from entities that are not traditionally considered competitors, like cash.
Another in the marine industry stressed the importance of instinct to be able to identify the right data source.
An apt analogy would be to compare data analysis to sieving for gold - finding useful nuggets from the petabytes of data being produced every day.
Certainly, instinct is important in the decision-making process. Throughout the discussion, the importance of asking the right questions was emphasised. Predicting and planning with data is required in every part of the business, from production to logistics and supply chain, not just finance alone. By asking the right questions, the right source of data will be identified to drive the information needed.
Need for immediacy
However, asking the right questions is only half the solution. In a time-sensitive context, the turnaround time for finding the answer is just as important.
In fact, timeliness and accuracy was an issue raised in the discussion. A speaker in the tourism industry, which faces seasonality constraints, noted that data risks becoming irrelevant and outdated if it cannot be produced on time. Different dimensions of the business will determine the lead time needed for data, based on how immediate decisions ought to be made.
I believe that to solve the issue of time and immediacy, there are disruptive innovations in technology and driving scenario-based planning available today. We need structured and unstructured data to plan and execute on the evolving business scenarios. Yesterday's technology will not serve today's business problems; and hence leading CFOs are redefining their technology appetite and driving organisations to next-gen technology. It's not about brands anymore; it's about innovation which can support the CFO transformation into a Chief Innovation Officer.
Evolution of the CFO role
As a corollary to adopting business analytics solutions, availability of data is not an issue. The panel agreed that CFOs are in a unique position to own all data in the organisation, as it helps them to drive the business.
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