With more than three-quarters of companies investing or planning to invest in big data in the next two years, according to Gartner Research, it’s clear that Big Data is no longer just big news — it is positively commonplace. And investments in data and analytics technologies have become mission-critical as enterprises struggle to make digital transformation a reality: For example, The State of the CIO 2016 found that Big Data and analytics is now the top priority for LOB.
For the CIO, this is great news. This relatively new focus on data-driven strategies to improve revenues, boost productivity and even create new businesses means the CFO has gotten more deeply involved to help propel the company into a transformative future. There is new talent to attract. New investments in infrastructure to decide upon. The company culture and mind-set may need to change to reflect new priorities.
In fact, the new economics of IT investment are forcing the CIO and CFO ever-closer together to work to cut costs within the service portfolio while managing necessary digital transformation and risk. Big Data strategies, it turns out, need muscle to create momentum — and that requires a powerful CIO-CFO partnership.
The CIO Needs CFOs to Move Beyond Finance to Innovation and Insights
CIOs already know that an IT infrastructure that supports innovation and insights is key to digital transformation. According to the Harvey Nash/KPMG CIO Survey, 56% of CIOs believe the most important component of successful digital activity is an IT infrastructure that allows greater innovation/agility — with a solid foundation that is robust and secure.
But while CFOs have always been focused on costs and finance, automation, shared services, and regulation, they are now redefining the CFO role dramatically in the face of digital transformation, according to KPMG’s “View From the Top” survey from 2015. Global experience is deemed the most important CFO attribute, while transformation and innovation are highly valued. The report found that “the CFO needs to … have experience beyond the finance function, identifying areas for growth and operational excellence across all business domains. This requires a range of skills, from the foundation and basics of the finance function to a strategic level with a focus on the outside world.”
To that end, CFOs are motivated to try to understand IT more than they used to. A recent survey by cloud ERP software provider Intaact found that CFOs want more insights into business than simply broad metrics related to profit and loss. The biggest technological investments over the next 18 months will be tools that offer more nuanced understanding of metrics such as customer lifecycle, churn and business unit performance — specifically data analytics and systems integration. In general, the CFO is evolving beyond the functional role of closing the books and mitigating risks to that of a holistic strategic advisor. Today’s focus on Big Data and analytics as it relates to business strategies across the enterprise has created a space for the CFO to do just that.
CIOs and CFOs Need to Seek Common Ground on Big Data
Meanwhile, CIOs have long advocated for improved data management and the typical enterprise’s newfound focus on data and cloud adoption has moved those issues to the forefront. For example, KPMG estimates that 20% of organizations’ ERP systems are in the cloud now, and that number will grow significantly over the next five years. However, the “View from the Top” survey found a majority of CEOs questioning their CFOs efforts to explore and implement these new technologies. While 70% of CEOs at “top-performing organizations” said leveraging cloud-based ERP systems and other emerging technologies should be a top priority for finance chiefs over the next few years, only about half said their CFO is doing a good job of exploring and implementing the best new technology.
As a result, CIOs need to seek common ground with CFOs, particularly when it comes to issues related to Big Data and analytics technologies. After all, Big Data has the potential to be a game-changer — but only if the CIO and CFO unite and work to understand each other’s perspectives and each educates the other about their needs. According to KPMG’s “View From the Top,” data and analytics will increasingly drive strategy and profits: 85% of the top-performing CEOs surveyed said that applying financial data to achieve profitable growth is the greatest strategic value a CFO can bring to an organization.
CIOs Can Help CFOs Become Transformational Leaders in Technology
As the role of the CFO has expanded from its original financial and controller focus to a far more strategic, holistic place, they’ve had to develop a clear strategy and play an active role in focusing Big Data and analytics on high-value opportunities. CFOs are now the executives that can potentially have the greatest impact on IT investments, but they must adapt their efforts to new approaches and home in on results that are properly measured and assessed.
It is CIOs that can help them do this: After all, according to the Harvey Nash/KPMG CIO Survey, in an age of digital disruption it is only the CIO who touches every part of the business, really understands the implications of system integration and has the depth of technological expertise to influence a disparate set of stakeholders.
And CFOs clearly need a technology partner, according to a new IBM study, which found the vast majority of CFOs (82 percent) see the value of integrating enterprise-wide data, but only 24 percent think their team is up to the task. As result, CIOs are under pressure to collaborate with CFOs and other LOBs to make sure the technology aligns with company strategies. "People are becoming aware of the value of data, not just in IT but overall," says Gartner analyst Nick Heudecker, who co-authored a survey of IT and business leaders, in an article for CIO.com. "They're creating data and using it as a competitive advantage."
On the other hand, Big Data initiatives are increasingly originating from the CFO and other business unit leaders as opposed to just IT. According to a Gartner survey, the number of big data projects enterprises are investing in or plan to invest in have increased to 76 percent in 2015 from 73 percent in 2014.
The bottom line is, the CFO has the potential and the power to become a transformational technology leader — as long as there is a meeting of the minds and a collaborative relationship with the company’s CIO. Big Data is at the core of the majority of today’s enterprises to enhance decision-making. But to make the most of data-driven investments, the CFO must rise to the occasion fully aligned with the CIO.
CFO’s and CIO’s can navigate the technology business management journey together through an integrated view of technology, cost, performance, supply, and demand. For more on this, visit KPMG’s Technology Business Management (TBM) service page and download the whitepaper “Moving Information Technology from a Cost to an Investment.”