Chief Financial Officers now have access to larger sets of data from more sources, allowing more advanced evaluation of the external commercial and economic landscapes, according to a new report by the Economist Intelligence Unit (EIU).
"Data-Driven Decisions For All: A New Business Paradigm," sponsored by Tidemark, also explores the transformation of the chief financial officer (CFO) role. The study also reveals that organisations are changing their approach to managing data, with IT staff no longer the gatekeepers for access and synthesis.
The ability to access more than just internally reported financial statistics broadens the CFO role from a basic accounting function to a wider mandate, encompassing operational and profitability drivers.
Spurred on by the ability to take data into their own hands, CFOs can take on responsibilities that depart from past roles. For instance, technology allows them to analyse larger and more diverse data sets, including non-traditional information sources such as social media or online forums.
Stepping outside of the traditional financial listings can often help CFOs spot irregularities in compliance or supply chain and even aid in assessments of the labour climate. Formal and informal media can yield new insights around sales trends or even investor sentiment, and the findings can help CFOs engage in more strategic tasks—identifying obstacles to a particular financial strategy or highlighting potential new paths for growth.
The widening access to data is likely to have a major impact on corporate profitability. In 2012, more than a third of C-level executives surveyed by research and consulting firm McKinsey & Company predicted that successfully leveraging big data—along with mobile, social and cloud computing— would boost their operating profits by 10% in just three years.
In a report called “Personal Data: The Emergence of a New Asset Class,” the World Economic Forum asserted that the broad trends taking shape around big data are so profound that they should be considered a new class of economic assets, akin to human capital and natural resources like oil and gold. Many business leaders now believe that large data sets—and the ability to make sense of them—have the potential to transform their businesses and industries.