It is not only newlyweds who need the secrets of a happy union. CIOs looking to build bridges with the CFO should look no further than analytics.
EY’s global study – Partnering for performance, Part 3: the CFO and the CIO – asked over 650 CFOs about their relationship with the CIO and their collaboration on four critical activities: cybersecurity, analytics, information management and digitizing the IT function. During the month of June, our aim is to map out how CIOs can build collaboration with their CFOs by tackling these critical priorities. This week’s blog turns the spotlight on issue two: analytics.
Analytics drives collaboration
As we have pointed out in earlier blog posts, analytics is a priority across all sectors, from life sciences to energy, from retail and consumer products to financial services. It is also a major driver of the CIO–CFO relationship. In EY’s study, CFOs identify the “need to improve analytics capabilities” and the “need for better data” as the top two drivers of greater collaboration. Helen Arnold, SAP CIO, remarked: “Analytics is the foundation for the CFO to get greater transparency and insight and to steer the business.”
Given the importance of analytics, what factors shape the effective CIO–CFO collaboration?
- Take a business-led approach, do not get side-tracked by technology
David Whiteing, CIO, Commonwealth Bank of Australia, says: “Too often, businesses have a discussion around technology, when actually the conversation should be about the outcome they’re trying to achieve.” CIOs, with CFOs, can draw up the specific business issues that analytics efforts are trying to solve, such as “How do we improve working capital?”
- Make data a fourth pillar of the business
Data should be seen as a fourth pillar alongside people, process and technology. In a recent EY study, 83% of financial services firms agreed that data is their most valuable strategic asset. CIOs can help CFOs identify the data analytics technologies and tools that can help turn this currency into insights: for example, how analytics can be used to assess the profitability of customer transactions across different channels.
- Don’t forget the human element
At heart, analytics programs involve human beings making decisions, as we outlined in a recent post. CIOs and CFOs can work together to ensure that the technology requirements of analytics are developed in sync with wider capability development, business process change and alignment of incentives.
- Consider legal, regulatory and trust issues
The European Parliament Committee on Civil Liberties recently voted to fine companies up to 5% of annual worldwide turnover for data privacy breaches. CIOs, working with the CFO, can ensure that robust measures are in place to counter this risk. For example, they can put in place global operating procedures for data privacy and the necessary information management processes to minimize the likelihood of the business unwittingly holding legally questionable data.
In many organizations, the seeds of data analytics were sown in the IT function, and the CIO continues to play a pivotal role. By combining the CIO’s understanding of data analytics technology and innovation with the CFO’s grasp of value and growth priorities, organizations can transform their strategic decision-making capability and unlock new sources of value.