I participated a few weeks ago in the Argyle Chief Financial Officer Leadership Forum in Los Angeles. At this event, I sat on a panel that was facilitated by the Sunny Donenfeld, Senior Associate Dean of the USC Marshall School of Business. Two of my panelists really impressed me--Elaine Paul, CFO of Hulu and Peter Hovenier, CFO of Boingo Wireless. While each operate in radically different businesses, they both demonstrate that being a CFO of a digital business is less about controllership and more about strategic leadership.
Digital CFOs get the value of data
What was particularly interesting was their perspective on data and analytics. I found their perspectives collectively invaluable to other CFOs working at companies that are about to be disrupted. Elaine, for example, is not focused on historical descriptive analytics but instead about driving what she calls the “ah ha insights” to drive the business forward. Similarly, Peter is looking for the value out of the data his company creates. For both, they are not just talking about the data to run the finance function. They claim that simple reports no longer work. They see the need for informed insights to drive business functions.
Elaine said in finance, 'it is one thing to know that there has been a variance. It is another thing to know the root cause of the variance'. In finance, both say that they are working to be great partners to the business. As Elaine and Peter see things, the 'quarter close' needs to be table stakes but the value going forward is in providing insights to business partners. Elaine says that increasingly this involves disciplines like data science. As a part of this, Elaine is helping to drive the advanced analytics agenda forward at Hulu. She is trying to provide the business statement of the problem that is missing when advanced analytics is the exclusive province of the technology leader.
More analysis and less financial planning
A key part of this is reorienting FP&A (Financial Planning and Analysis) function. Elaine says that she is working to move from FP to A. Elaine said, 'I want FP&A to be more about the analysis than planning. This is where the value is generated. This has been a change that we’ve gone through in the last 3 years but it has required personnel, technology, and focus'.
More self-service business intelligence
As a part of this, Elaine and Peter are pushing for a lot more self-serve in the business intelligence that gets delivered. Yet, they both acknowledge there are risks with spreadsheets. Before data ends up in a spreadsheet, it should be cleaned. As for the priority for analytics, Elaine and Peter say that they live in rapidly changing industries that require rapid fire responses. Accessibility to data is now the life blood of their organizations. Simply put, they claim data about the ability of their companies to win. We win if we can use data in a smart way. Elaine continued by saying Peter and I are digital companies, our entire company and strategies are digital.
In terms of the viewpoint on where analytics lives, Elaine agreed there should be analytics within the CFO function. But where it lives at a company, my personal answer is that depends on a company’s state of maturity, there’s an evolution. Elaine says it is essential that data be self-serve and clean. Peter agrees with Elaine on this point. Elaine said, 'we need more self-serve tools and to make sure data is clean'.
Today being a CFO is about being a business partner. CFOs should aim to be business partners to the CEO and to be increasingly about shaping the direction of the company. To do this, digital disruptor CFOs are taking a hard look at data and how it is delivered. They clearly understand the role of data in making their company win or lose. There is a lesson in here for incumbent company CFOs.