Recent events have reinforced the CFO’s elevated status. The CFO’s most critical task is measuring and monitoring company performance, but providing strategic input comes a close second and developing people with the right skills remains a top-of-mind issue. Additionally, managing enterprise risk and integrating different sources of information to generate meaningful business insights have soared up the CFO agenda.
So, in a customer-activated enterprise with the finance organizations responsibilities expanding, how are CFOs staying ahead of the game?
To answer this question, in early March, IBM released the CFO Insights from the Global C-Suite study, based on more than 4100 face-to-face interviews conducted across six C-level roles (576 CFOs among them) in more than 70 countries and a variety of industries.
Then came the May THINK Finance Forum in New York City, positioned to engage and foster a deeper discussion with leading CFOs around the evolution of their role. IBM CFO Martin Schroeter kicked off the discussion with some interesting highlights from the CFO Study, including:
The fact that CEOs consider technology the single most important external force shaping their organization’s future
The recognition by CFOs that data is key to their ability to provide meaningful insight to their organization’s performance
- The dirty little secret that the majority of CFOs are still using spreadsheets and intuition to support their finance function (Many CFOs in attendance nodded their heads in agreement)
Martin also presented three key imperatives around big data from the CFO point of view that addressed the new needs and challenges big data presents such as:
- How big data drives enterprise agility through enterprise integration: Perfecting finance efficiency
- How big data helps businesses make better decisions by anticipating the future: Capitalizing on business insight
- How big data leads business model innovation through a new discipline of performance: Creating profitable growth
As a presenter at the event, I was able to engage in a deeper dialogue with CFO attendees around the three key imperatives from the CFO Study that revealed the following insights:
Data is the key driver for CFOs to transform at the enterprise level. Data analytics is essential to anticipating the future for better business decisions such as detecting fraud, predicting customers who won’t pay on time and conducting propensity to buy modeling. However, data is also essential for enterprise integration and innovation targeted at profitable growth.
We must have the culture and talent to adapt to this change. In order to become a data-driven organization, we need the right talent and the culture to support the change to this new model. Change management is a vital part of the process and, therefore, the functional collaboration, or the C-suite collaboration, becomes a critical success factor.
- Outperformers called “Performance Accelerators” are organizations where finance and marketing collaborate to build a customer-activated enterprise: The CFO Study demonstrates that the Performance Accelerators understand their customers better than any other group. There is a significant opportunity here for finance and marketing functions to collaborate. This partnership enables both CMOs and CFOs to use data to understand each customer as an individual rather than by segment, it makes financial evaluation for marketing investment more accurate and timely.
CFOs clearly recognize the importance of leveraging data to their business advantage. They are also well positioned to create foundations for common business language and developing an organization culture that encourages collaboration.
The level of adoption or integration may be different for each organization, but what is clear is that they all support a data-driven transformation. I am excited to be part of this transformation, helping organizations change and adapt as they stay ahead of the game leveraging big data.
- Find out more about the C-suite Study and download the full CFO Study report.
- Enjoy this brand new page on our finance, risk and fraud consulting practice and learn how IBM can help improve core finance function and performance management for your business