According to the IBM Institute for Business Value 2013 Big Data & Analytics Study, only 8 percent of chief financial officers across the nation are driving Big Data efforts for their organization. With 70 percent of companies saying Big Data is part of their strategy to generate revenue, it seems that CFOs would be on the front lines of embracing this tool.
Approximately 60 percent of companies that utilize Big Data say that they experience return on investment within the first year of using it. Chevron Corp., for example, invested in Big Data to transform its struggling audit function. Through various tests on its accounts-payable transactions, the finance department was better able to understand and avoid the greatest business risks while adjusting audit coverage area. The result? Efficiency was improved by an estimated 15 percent.
Efficiency isn’t the only way that CFOs are tapping into Big Data, though. International Business Machines Corp. used the knowledge that Big Data provided to identify potential risks as they entered new markets, providing the ability to compare external metrics against internal ones to protect the company’s financial position.
Understanding the Value in Big Data
Companies like Amazon and eBay that know an incredible amount of information about their customers showcase the value that Big Data provides. For CFOs, Big Data translates big insights into consumer trends, popularity, and interests. Straddling various data sources allows companies to specialize the information they collect to adjust their larger strategy.
For companies and financial teams that haven’t yet fully utilized Big Data, it’s important to:
- Start small. Investing in a smaller pilot project allows CFOs and internal teams to become cross-functional and build up the skills, knowledge, and efficiency that are needed internally in order to fully utilize Big Data.
- Tap into data sources. Enterprise servers must be made available to various departments aside from the finance team for optimal success. Divisional rivalries actually help the process by ensuring that the data is divided into silos, thereby creating pressure and pushing the right incentives.
- Make the push. Perhaps the largest challenge in embracing Big Data is the CFO’s responsibility of convincing executive management to create concrete business plans for Big Data.
Still, the CFOs that have embraced Big Data believe in its promising future for financial analytics.