Easy ways to get the answers you need.
Or call us at:
Looking further, wider, deeper: more insights from the IBM CFO Study
Delaney Turner 270002T14M email@example.com | | Tags:  cognos spss cfo cfo_study analytics
0 Comments | 1,694 Visits |
Earlier today I attended a live Webcast featuring William Fuessler of IBM Global Business Services (GBS) and Angelia Herrin of the Harvard Business Review. The title was "How CFOs Succeed - or Fail - in Closing the Execution Gap."
Essentially an overview of the findings of the recently released IBM CFO Study (albeit using an unadorned "Charlie Rose" look), Fuessler's presentation provided even more empirical evidence of trends in the CFO's office that my Innovation Center colleagues have been watching, analyzing and responding to over the past five years. For example:
No doubt, said Fuessler, the turmoil of the last 18 months has accelerated these trends. But recession or no, the chart below shows the daunting scope of decisions CFOs are now called into making, either on their own or as part of the executive team:
Given these results it's obvious that CFOs now must look further into the future, wider across their own organization and deeper into their own operations. In doing so they must call on IT to help them increase both the efficiency of their own core processes and the effectiveness of the insights they provide to the rest of the business. Hence CFOs' top three enterprise-wide priorities: predictive capabilities, information integration and better risk management.
How fortunate, then, that all of these (and many others) fall within the realm of Business Analytics software. Fuessler didn't credit software alone as the "magic bullet" solution - Innovation Center members know better than most that executive support and culture change are critical elements of any project. But according to the Study, Fuessler said, companies that integrate analytics into their processes and decision-making consistently outperform their peers across finance metrics near and dear to any CFO's heart. The chart below shows that between 2004 and 2008, companies led by these "Value Integrators" saw increases of 14 percent, 11 percent and 12 percent respectively across revenue growth, EBITDA and return on invested capital.
So where does that leave you? The path to Value Integrator (high efficiency, high effectiveness) depends on where you are right now. If you're in the "Disciplined Operator" category (high efficiency, low effectiveness), you need better predictive capabilities and an enterprise-wide view that improves your ability to guide strategy. If you're in the "Constrained Advisor" category (low efficiency, high effectiveness), you need a structured and scalable approach to your data that extends your insights into other departments or functions.
If you're in the "Scorekeeper" category (low efficiency, low effectiveness), unfortunately you have the toughest row to hoe. Here, it's best to improve efficiency first. Specifically, this means automating key processes like report creation and establishing standard data definitions, processes and charts of accounts. This is the foundation of any business analytics project. From there, Fuessler said, you can add analytics in small doses as your organizational culture and analytical maturity permit. It's a long journey with plenty of detours, but given your alternatives it's the only way to go.
Happily, right now there's almost an embarrassment of riches for you to choose from to help you get started. Any one of these links should put you on the right path: