From mobile phones to healthcare applications, customer usage data and more, the term “Big Data” describes a method of approaches to dealing with the troves of data coming out of the rapidly increasing number of endpoints and expanding databases. And the impact of the “Internet of Things” is still to be felt, as billions, and perhaps even trillions, of data collection points start to come online.
So the question is, how will we deal with all of this data? Where are the opportunities, and is this concept even realistic for small to mid-sized company companies? And if so, why, and where will CFOs need to invest in order to take advantage of data insights?
On Thursday, May 15, 2014, The CFO RoundTable hosted “Big Data: Why Should I Care?” as part of our 2014 CFO Technology Conference. During this time, our panelists debated the efficacy of data analytics for CFOs, offered advice on the areas to invest, and discussed the impact of data analytics for CFO careers.
Managing Data Is Not A New Problem
Xena Ugrinsky, Partner,
KPMG LLP (Moderator)
Mark Jaffe, CEO, Prelert
Nathaniel Lin, PhD, Founder
and President, Analytics
Simon Moss, President
and CEO, Pneuron
|Jo Tango, Partner, Kepha Partners|
To get us kicked off, the panel advised that the problem that big data analytics tries to solve is not a new one. We’ve always had reams of data to pore through, but until recently, only had a few lenses with which technology could help us understand what our data was telling us. In fact, the panel shared that IT doesn’t even look at 1% of our systems data.
But as we add more connections to our systems, our data becomes more complicated and costly to extract. That’s where big data analytics steps in – it provides more lenses with which to extract data into meaningful insights that can impact our strategic decision making.
In fact, according to our panel, CFOs are much more empowered than they think they are when it comes to big data analytics, and in one way or another, might already be working with smaller forms of big data analytics without even knowing it (think of your sales or marketing analytics). In fact, the panel stated that 67% of companies use analytics in one way or another to get a competitive advantage and better profitability.
Getting Started, One Data Point At A Time
The panel recognized that many CFOs have been wary of deploying analytics technologies into their own enterprises, and even admitted that the barrier to entry is still too great for the majority of smaller, privately-held organizations. In fact, the industries taking advantage of big data analytics, such as retail, healthcare, insurance, e-commerce, etc., are known for having larger budgets and resources available to test and deploy new technologies.
But that doesn’t mean that the average CFO can’t pioneer a new data analytics initiative. In fact, as stated above, many companies already use smaller forms of analytics to uncover trends in their data – they just don’t label it as ‘big data’ analytics.
The panel advised that CFOs should work with their teams to figure out potential use cases for big data in your organization that could help change your business. For example, if your business relies heavily on how your customers behave online, you may want to focus your efforts there. However, note that data access alone does not mean that you’ll get insights from it – behavioral analysis is key.
The panel further advised that CFOs consider analytics technologies that ‘go’ to your data, meaning that it may be more cost effective to invest in cloud-based analytics, rather than systems that you have to port your data into. Why? As the panel put it, finding the relevant data to put into an analytics system is like finding a needle in a stack of needles – rather than wasting the time and energy in determining the data that’s valuable, move your analytics to where your data is and let the system do the work.
The New Data Scientists
Once you’ve identified the data to analyze, and you have the tools to garner insights, your next step is to identify who will be tasked with translating these insights into actionable business tactics.
The panel advised attendees to not limit themselves to data scientists, nor to immediate full-time employees. In fact, your first step into big data analytics will most likely be a short-term project, and should be treated as such.
According to the panel, CFOs should consider a part-time employee or consultant who demonstrates strategic thinking and understands the possibilities that the analysis reveals. This person may even be a lower-level employee in your organization who already has the access and has demonstrated the desire to get involved in the strategic decision-making in your organization.
No matter who you task with data analysis, the panel urged CFO attendees to encourage risk, take chances, and accept what your data analysis tells you. After all, you won’t know what’s possible until you push boundaries, and you won’t be able to grow your business through big data analytics without being open to both good and bad news.
Elevating The CFO Discussion
The biggest challenge for today’s CFOs is to be strategic, not tactical, and big data analytics can help you get there. Analytics and insights can better prepare you for board conversations, re-engineer programs that aren’t producing results, provide guidance on new ideas that can help your business explode, and give you that 30,000 foot view that you’ve
been looking for in your business.
The panel also encouraged CFOs to get online and start asking peers for help and ideas. After all, you never know which of your peers are facing the same challenges you are until asked.
(Blatant advertising – join our private LinkedIn group here to ask your peers about their big data analytics projects).
Photos and More Information
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