CFOs Are Ideal Big Data Initiative Leaders
Big Data & Analytics has become one of the central themes for organizations in recent years. The vast growth in volume, variety and velocity of data as well as the constantly improving technologies and analytics capabilities are providing organizations with many opportunities to create much value from data. In many organizations Big Data initiatives are, however, emerging in various areas without a comprehensive governance and strategy. We believe that the CFO can play a strong coordinating role in ensuring that Big Data initiatives are organized effectively.
Capgemini research indicates the following key challenges for Big Data initiatives:
- scattered data (management) in the organization;
- ineffective coordination;
- lack of a clear business case; and
- the dependence on legacy systems.
Due to the ineffective coordination, Big Data & Analytics teams are formed at various places in the organization; often without a clear organization-wide governance and strategy. The commercial department, for instance, hires some statisticians for market and customer analysis; HR works with talent management analytics, an operating division launches initiatives for operational process improvement or fraud detection and IT starts a data management program.
The result is that best practices and success stories are not shared, that prioritization does not occur and that the (often scarce) analytics capabilities are not utilized in the most effective manner. Better coordination and new ways of collaboration are necessary.
Big Data Requires Executive Leadership
Leading organizations can choose to organize Big Data & Analytics in various ways. The key to success requires, however, strong ownership from the top. In addition, our research has shown that organizations with a more centralized approach and structure on Big Data initiatives have been more successful. In some cases, the leading role is taken up by a VP strategy and data analytics; other successful organizations appoint, for example, a Chief Data Officer. But what role should the finance function play?
In our view, the CFO is perfectly positioned to take a leading and coordinating role in this area. As a business partner and integrator value the CFO is not only focused on purely financial data anymore, but he is getting a pivotal role in the area of integrated and data-driven decision-making. Business controllers advice on, and support decision making by analyzing and interpreting data, including non-financial data, and making predictions about the future. Big Data is not different, it is a major source for the creation of management information that should lead to better forward-looking decision-making. The step from finance through BI to Big Data & Analytics is therefore quite logical.
In addition, change management is one of the most important critical success factors for Big Data initiatives: promoting a culture of data-driven decision making. This is also an area in which CFOs and business controllers have been involved since years. Fortunately we see that the finance function in many organizations is asked to actually play an active coordinating role in setting up an effective Big Data & Analytics operating model.
This does not mean that (almost) all analytics activities should be executed by finance; a center of excellence might be the best option. What is crucial is to build a good bridge between the business (Why are we doing this? What kind decision-making do we want to support? What value do we want to deliver?) and IT (how we organize data management? What tools and technologies do we use?). People, skills and culture are the key factors to focus on.