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IBM Study: CFOs Struggle to Leverage Big Data

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The majority of CFOs do not fully capitalize on the power of existing technologies, according to IBM’s latest CFO Study, instead using spreadsheets and intuition for 66 percent of their work.

Additionally, while 82 percent of CFOs recognize the value of leveraging big data, only 24 percent think their team is up to the task, according the study, “Pushing the Frontiers.”

This gap has widened since the question was first asked in 2005, with a 205 percent increase between the importance of this data and the ability to utilize it to full value.

Big data was a central theme of the study, conducted by IBM’s Institute of Business Value based on 576 face-to-face conversations with CFOs globally.

Almost half (44 percent) of top CFOs “combine internal and external data to produce insights to track/forecast supply-chain financial data, planning/predicting resource capacity and conducting industry/competitor analysis.” These CFOs than use these insights to “create profitable growth, spending more time on forging an infrastructure to capitalize on Big Data, handling acquisitions and divestitures and developing new business models.”

“In our discussions with CFOs over the past decade, the significance of technology and analytical tools in transforming the finance function and broader enterprise has continuously risen,” stated Bill Fuessler, partner of finance, risk and fraud for IBM Global Business Services. “Data has always sat in the center of a CFO’s job responsibilities, and CFOs now recognize how insights from Big Data are helping their company become more competitive. CFOs are being asked to anticipate the future and discover new areas of revenue growth - we anticipate this will spur a new strategic alliance between the CFO and CMO as they partner to drive the corporate growth agenda.” 

The IBM study also uncovered a subset of CFOs who are more effective in finance efficiency and analytical insight than their peers, defined as value integrators. Within that group, an even smaller set of high performers called performance accelerators were identified: CFOs so far ahead of their peers that they have been 70 percent more successful—measured in revenues and profits generated in the past three years—than value integrators.

According to the study, the average CFO relies on spreadsheets and intuition for 66 percent of their work, while performance accelerators use a combination of internal and external data, making them more effective at analysis such as tracking and forecasting supply-chain financial data, planning and predicting resource capacity, and conducting industry and competitor analysis. 

Other IBM insights into performance accelerators include that they: operate more efficiently than other CFOs; are more likely to use a standalone, cross-functional shared services center for transactional financial activities; have a better grasp of the digital domain. Furthermore, the majority of performance accelerators (70 percent) more extensively understands and collaborates with customers than other CFOs.

The full “Pushing the Frontiers” study is available on the IBM website.

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