The CFO Should Also Be the CDO -- Chief Data Officer

I recently had a fruitful discussion with a panel of CFOs at the 4th Annual CFO Innovation Asia Forum in Singapore, which drew an audience of more than 300 CFOs. The main takeaway was that the best driver of CFO transformation programs is building capabilities to empower the CFO to become 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” role within the CFO office.
 
Honing the right instinct for data
To leverage on the availability of big data for decision-making, analysis should be aligned to business objectives and, and targeted at where it matters the 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.
 
An apt analogy would be to compare data analysis to sieving for gold – finding useful nuggets from the petabytes of data being generated every day.
 
Another CFO in the marine industry stressed the importance of instinct to be able to identify the right data source. Certainly, instinct is important in the decision-making process. Throughout the discussion, the importance of asking the right questions was emphasized.
 
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 were among the issues 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 A speaker in the tourism industry, which faces seasonality constraints, noted that data risks becoming irrelevant and outdated if it cannot be generated on time.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 organization, as it helps them to drive the business.
 
There is also a greater level of appreciation today for business partners operating in your markets to collaborate on information, to make the right business decisions.
 
Having the advantage of unfettered access to information, even sensitive information both within and external to the organization puts the CFO in a new role. Effectively, the CFO is uniquely positioned to be a custodian of data.
 
Therefore, with technology, CFOs are increasingly empowered to adopt a more scientific, empirical approach in their processes.
 
We at Anaplan have seen growing interest in scenario-based performance management processes, which drive predictive nature for planning and analysis. This needs flexible, detailed and strong algorithms in business planning, which are offered by disruptive innovations in Business planning and analysis.
 
We are helping CFOs in a driver-based and more scientific, real time and strategic modelling of business problems. CFO transformation programs are better equipped with these goals.
 
Our conclusion? Don’t let technology bottleneck your performance. Research, adapt and deploy a modelling and planning platform that lets you stay ahead in CFO transformation and predictive capability in planning.
 
About the Author

Samir Neji is Managing Director of Anaplan Asia, a cloud-based, in-memory modeling and planning platform for finance, sales and operations. He was a panelist in a discussion on “Sourcing and Transforming Data into Information” at the 4th Annual CFO Innovation Asia Forum on 25 June 2013.

 

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