Chief financial officers are the logical choice to own analytics and put it to work to serve the needs of their organizations.
That’s the business world as it should be, according to Frank Friedman, CEO (and former CFO) of Deloitte LLP.
So much has been written recently about the CMO’s newfound ascent as an agent of analytics, with transformational power to put customer and prospect data to work. Now, Friedman makes a valid argument for the CFO to be added to this roster.
Friedman understands that analytics can be a powerful tool to help businesses answer questions about the future such as: What challenges will organizations face a few years out and what services might they need? How should those services be priced? What type of resources might be needed and where? Where might the business be vulnerable if the data underlying certain assumptions change?
He adds that it’s important to note that the power of analytics relies on:
- The quality and preciseness of the questions being asked
- The organization’s ability to gather the data to address those questions
- The integrity of the data that’s gathered
- The ability of users to objectively draw insights from the data
“As with any business process, there must be a system underlying the analytics effort and a leader in order for it to be effective,” Friedman says.
CFOs are right for the job because, for one thing, they “own” most of the massive amounts of data gathered from their own operations, supply chains, production processes, and customer interactions, he notes.
Friedman says that CFOs are already using analytics to better determine the areas where their businesses are strong, where they need to improve, and how to more effectively distribute limited resources more effectively.
In addition, many CFOs use analytics to deal with their organization’s strategic issues. Owning analytics would allow them to continue expanding their strategic leadership roles to increase revenue, enhance their relationships with leaders throughout their organizations, and become more influential in areas other than finance, according to Friedman.
Finally, as the “stewards of value and impartial guardians of truth” across their organizations, CFOs have earned the credibility and trust they need to convince people of the accuracy of the insights generated from the data.
“When people are provided observations that do not align with their thinking, there is a tendency to say, ‘That can’t be right,’ and it can be challenging to convince them that the results and the data they’re based on are accurate,” Friedman notes. “If they don’t trust the messenger, they are unlikely to trust the message.”
Perhaps the final take-away is that anyone with a senior title and the agenda to progressively shake up the business through the powerful use of data analytics should grab this mantle and make it happen. Ultimately, an organization’s competitiveness is at stake.