The ready availability of Big Data and the growth of data analytics capabilities has fundamentally changed the way many companies operate. There is, however, still some debate as to who exactly within a firm holds responsibility for ensuring the data is fully exploited.
Finance departments have always had huge amounts of data at their disposal, and they often have the best data talent among its staff. According to a Deloitte survey 18% of respondents said that the CFO is now in charge of their analytics - coming second only to the ‘business unit or division head’ with 23%.
Having the CFO take responsibility for data makes sense both for them and for the company as a whole. Firstly, CFOs already ’own’ most of the data that companies are collecting from their own operations, supply chains, production processes and customer interactions. They also, by the very nature of their role, have the best view of their company as a whole, and therefore have the best awareness as to where investment in analytics is needed and the ROI.
Analytics help the CFO fulfill many of their most important functions. It enables them to hedge against volatility and to respond faster, and with greater insight, to changes in the marketplace. Arguably more than any other C-Suite executive, the CFO needs to make the most accurate predictions in their decision making processes. Forecasting financial performance, pricing products and services, strengthening operations, identifying new markets, improving margins, and assessing and monitoring risks, are all the responsibilities of the CFO that require detailed knowledge of a possible outcome. Having the right analytics software in place can help CFOs accurately predict the future by analyzing current and past trends.
The modern CFO needs to be acting as a partner to the CEO, and drive growth across the organization. Many are already using analytics to identify business areas where those analytics can bring value and competitive advantage (for example, drive operational insights). CFOs may be reluctant to take charge of analytics in operational areas because it’s not necessarily a ‘big picture’ issue, however, much of a company’s profit can fall between the operational cracks, and analytics is central to driving improved operational discipline.
Many respondents to the Deloitte survey claimed that analytics was better if it was not in the hands of one person, and was instead dealt with by individual departments. Key to effective analytics is taking an holistic approach in which everyone knows what approach is being taken. A decentralized approach hinders this and is likely to spread confusion that could render it less effective. The CFO is best placed to lead a centralized approach.