DESPITE OUR naturally humble predilections, few finance directors could deny that the role and influence we hold in our respective businesses has grown significantly over the last few, volatile years. Where we were primarily focussed on the financial management of our organisations, our role on the board is increasingly strategic, tasked with evaluating shifts in business strategy, modelling new product successes (and possible failures) and assessing new market opportunities – all directed at delivering growth and stability in a volatile market.
In theory, thanks to the increasing power of business technology today, we have more information than ever before to help us make better business decisions. This information is steeped in detailed financial models and real data from around our business, our customer base, and our market environment. Unfortunately, the deluge of data relating to our business – whether that’s an insight in an email, a critical piece of customer information in a structured database or an obscure trend hidden in the sales data, or even a broader insight from customer conversations on social media – has the potential to keep us from seeing the wood for the trees.
It used to be simpler: data, as we knew it, was structured, and existed in defined places within the corporate empire. However, a combination of cheaper technology, the internet, the rise of social media and the consumerisation of IT has turned this upside down.
Data is now growing exponentially – structured and unstructured, alphanumerical, visual and aural – and, crucially, it exists both inside and outside the corporate firewall. The variety and increasing size of these data-sets has made them difficult to work with using traditional database management tools, with new units of sizing such as terabyte, exabyte and zettabyte now necessary to classify them. The difficulty for CFOs is that not only do they need to pay to capture, store, search, share, and analyse this data within the corporate firewall, but they need to enable the business to find increasingly innovative ways to mine it and transform it into valuable, actionable information.
Enter ‘big data analytics’: a new set of technologies that promise to draw together structured and unstructured data, derive actionable insight from it, and inform business strategy in real-time. Say you’re an online retailer and you want to increase the basket value from each customer. In assessing the potential value of stocking a new category of product, you might want to take a variety of insights into account, including conversation topics between your existing customers on social media networks, real-time weather forecasts, and – fundamentally – trend-data relating to customer shopping patterns. All of this data needs to be captured, brought together and modelled; sometimes from data sources you own, sometimes from external ones. This is what big data analytics platforms do – and companies like Amazon are already making full use of them.
A critical benefit of this type of insight is a more sophisticated, agile business which is able to capitalise on new trends or opportunities in hours or days, instead of months or years. O’Reilly Media, for example, uses big data analytics to spot consumer trends and insight points, analysing mountains of data to identify the hot topics for their next set of ‘how-to’ books and guides. What better insights could you ask for than those of your own customers and prospects? Today, if you know how and where to look, these insights are freely available.
Another example of the potential of big data for the CFO lies in in the development of new revenue streams and business models which become possible if you can successfully monetise your own data assets. A particularly prominent example here is the New York Stock Exchange: the Exchange set up a company called NYSE Technologies to let customers have access, in real time, to every piece of historical data, transaction and ‘tick’ ever to cross its systems. NYSE Technologies is now marketing this data as a service to other companies, who can model their market engagement using this real-time feed. The team at NYSE Tech have capitalised on their dataset to create a new revenue stream for the business, with all the benefits that brings.
Early-bird CFOs who catch this worm and successfully unlock the full value of their corporate information will help to put their organisations in a prime position to reap significant rewards. However, there may be a need for a new skillset in the CFO’s organisation: in the same way that companies 30 years ago persuaded their CFOs to commit investment to the recruitment of computer scientists, today we must be looking to bring in a new breed of ‘data scientist’ to support us in a more sophisticated, real-time analysis of our business data.
This, in turn, will drive business strategy and decision-making, and will ultimately create new revenue streams. The full potential of this is yet to be seen, but the first exploratory steps are being taken today.
Once the value of information as a business asset unto itself is recognised, converting raw data into valuable sources of revenue becomes possible. Digging deeper into your organisation enables you to consider and support your business in completely new ways. The increased business insight delivered by big data analytics tools will empower you to ask the questions you never even knew to ask – and lead you to some important answers around your competitive advantage, potential for innovation, and ability to exploit new market opportunities.
While the volumes of information we possess continues to explode, each piece holds unique value which is waiting to be mined and interpreted. By equipping your organisations to deploy powerful new analytical tools and harnessing big data effectively, you will help your business to exploit new intelligence, spot emerging business trends, and accelerate go-to-market initiatives that may otherwise have been impossible to conceive.
Steve O’Neill, CFO EMEA North, EMC Corporation
The number of start-ups setting up in London’s tech district fell by 70% over the last year, new research shows
In an era of modern finance, leadership is becoming digital leadership, explains Oracle
CIOs have switched from reporting to the CFO to the CEO, but has this affected CFOs? Sooraj Shah investigates
Digital technologies such as blockchain and analytics are being prioritised by public sector finance chiefs