Chief financial officers (CFO) are no longer just the financial stewards for their organizations. They're business strategists. And when it comes to information technology investment strategy CFOs have more influence than any other executive, according to the 2013 Gartner FEI (Financial Executives International) CFO Technology Study. In today's business world, a comprehensive IT investment strategy must take into account the power of "big data."
Though it can seem nebulous and unstructured--and outside the traditional purview of finance leaders--big data is in fact one of the most important assets financial executives have when it comes to boosting productivity or profitability.
Big data is an aggregation of demographic information gathered from social sources like Twitter feeds, Facebook statuses, blogs and surveys, as well as automated tools like sensors. It can include government data, weather patterns and more complex variables. It gives insight into customer preferences, behaviors and purchasing patterns along with internal use of space and resources.
The analysis of this data presents an opportunity for CFOs to collaborate with chief information officers (ClOs) to improve business processes and outcomes. In tact, in a recent survey conducted by Oracle Corp. and Accenture PLC, 57 percent of finance executive respondents agreed that investments in big data and analytics will be key sources of competitive advantage moving forward.
The problem is that big data is just that: big. Companies already deal with massive volumes of information. Consider, for example, Google, which handles 1.2 billion Internet searches every day. This level of data can quickly overwhelm finance leaders and their teams if they don't have the right IT infrastructure, processes and talent in place to store, process, evaluate and apply big data most effectively.
And "big" is only getting bigger. The McKinsey Global Institute estimates that data volume is growing by 40 percent each year and will increase by 44 times between 2009 and 2020.
Beyond the issue of volume is variety. Traditionally, enterprises mainly managed only structured data, which had a well-defined format that made it easy to categorize, search and analyze. Big data, however, is "messy." The fact that it comes from everywhere--from websites to sensors embedded in electrical networks--makes it very unstructured, yet also very valuable if mined for patterns and meaningful themes.