26th Aug 15
It is becoming increasingly evident that analytics have a huge amount of potential for CFO's in multiple aspects of business. Analytics enable CFO’s to make faster and better-informed business decisions by facilitating organisations to move from raw data towards more knowledge and understanding. Miles Ewing, a Principal at Deloitte Consulting LLP, noted that CFO’s “can bridge the gap between strategic and operational decision-making with analytics”.
By using analytics to exercise more centralised control over operational decision-making, CFO’s can expand their influence outside traditional financial functions to meet the increasing expectations placed on their role.
Despite this, according to EY only 53% of CFO’s say that they make a significant contribution to determining where analytics can add most value to their organisation. Some CFO’s could be hesitant to lead the way in using analytics in operational areas because it’s not about ‘big picture’ issues. However, EY reported that of the 652 CFO’s that they surveyed across the world, it was the 48% who said that analytics were a very high priority due to an EBITDA growth of more than 10% over the past three years. As Ajit Kambil, the Global Director of Deloitte’s CFO programme, said, “A lot of profit can fall in between the operational cracks, and analytics can be a game changer in the way it leads to improved operational discipline.”
A further advantage of using analytics for CFO’s is that real-time data immediately identifies errors within an organisation, enabling them to react quickly and efficiently. Real-time data also allows organisations to stay ahead of the competition by notifying the CFO if a key competitor has altered its strategy or prices. Furthermore, CFO’s can manage their KPI’s on a daily basis and access all financial information easily through the use of one fully-integrated dashboard rather than having to go through vast numbers of spreadsheets.
The advantages outlined above are amongst a plethora of reasons why Frank Friedman, the CEO and former CFO of Deloitte, has urged CFO community to raise the profile of analytics to a higher level, warning that failure to do so could leave them behind their competition.