Engaging Your CFO in Business Analytics | Palestrante: Celso Chapinotte

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Gareth Herschel
Presented by
Celso Chapinotte
celso.chapinotte@gartner.com
To the Point: Engaging Your CFO
in Business Analytics

2. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
1
The Digital Tsunami Is Upon Us

3. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
We Need a Three-Part Response to Face
the “Digital Tsunami”
Renovate
the core of
IT
Create
powerful
digital
leadership
Build bimodal
capability
• Clear digital roles
• Savvy digital executives
• Digital vision & digital legacy
• Information
• Cloud/Web-scale infrastructure
• Talent
• Sourcing
• Agile development
• Multidisciplinary teams
• Innovative partnerships
• New risk/speed trade-offs
DigitalizationIT Industrialization
2

4. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
We Need a Three-Part Response to Face
the “Digital Tsunami”
Renovate
the core of
IT
Create
powerful
digital
leadership
Build bimodal
capability
• Clear digital roles
• Savvy digital executives
• Digital vision & digital legacy
• Information
• Cloud/Web-scale infrastructure
• Talent
• Sourcing
• Agile development
• Multidisciplinary teams
• Innovative partnerships
• New risk/speed trade-offs
DigitalizationIT Industrialization
CFO
3

5. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Why Must the CFO Be Your Ally for
Business Analytics?
• The CFO determines investment levels
• The CFO oversees capital budgeting
• Increasing role in Financial Governance
• The CFO (and the finance team) are struggling to get the
information they need about business effectiveness from
ERP and other business applications
• The CFO has a great deal of influence
• The CFO may be your boss
Investments
Business
Processes
Influence
4

6. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. How is the influence of the CFO changing?
2. What does our CFO study tell us about their
role in business analytics?
3. How do you enable your CFO to be more
strategic through technology?
5

7. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. How is the influence of the CFO changing?
2. What does our CFO study tell us about their
role in business analytics?
3. How do you enable your CFO to be more
strategic through technology?
6

8. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Titles/Job Functions
CFO, Executive VP, Senior VP, VP-Finance 60%
Controller 14%
Treasurer 7%
Other Titles 19%
Company Size: Annual Gross Sales
Under $50 million 21%
$51 million to $499 million 38%
$500 million to $999 million 10%
$1 billion to $9.9 billion 24%
$10 billion or more 7%
Financial Executives International
N = 237
7

9. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Influence Over IT Investments Compared
to 2 Years Ago
Decreased
significantly
0
Decreased slightly
7%
About the
same
49%
Increased
slightly
23%
Increased
significantly
21%
7%
7%
10%
10%
11%
16%
38%
To lower enterprise costs of the
IT portfolio requires your
concentration
Risk impact on the enterprise IT
portfolio requires more of your
attention
IT needs additional senior
executive support as it
competes for funding
IT has been mismanaged and it
needs to align more with
corporate goals/objectives
To ensure ROI on IT investment
decisions
To increase efficiency with
finance applications and
finance enablement
You are an enabler of corporate
strategy and see IT is key to
that strategy
Reasons for Increased Influence
CFO influence up 44% compared to 2010-2011.
N = 237
8

10. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
1%
3%
14%
52%
27%
4%
2%
15%
39%
35%
Business Unit Leader
Chief Administrative Officer
Chief Operating Officer (COO)
Chief Financial Officer (CFO)
Chief Executive Officer (CEO)
Current
Recommended
• CFO continues to own many IT departments.
• Most CFOs think IT should report to them.
CIO or Most Senior IT Executives
Report to …
N = 237
9

11. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Role That Authorizes Technology
Investment Decisions
2%
4%
7%
8%
24%
24%
26%
Steering Committee of IT and
Business Area Operational Managers
COO
CIO
CIO and CFO Together
CFO
CEO
Steering Committee of IT and
Business Area Executives
N = 237
CFO continues to lead IT investment.
10

12. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
29%
26%
31%
10%
3%
IT is responsible for
managing and operating
technology systems and
resources efficiently
IT is responsible for
enabling business
operations by building and
operating technology
systems defined by the
business
IT is responsible for
contributing to the
enhancement of business
operations by using
technology proactively to
raise business performance
IT is responsible for being
the primary source of the
enterprise’s competitive
advantage as technology is
a differentiator in enterprise
products or services
IT is responsible for the
transformation of the
enterprise’s business model
and the creation of new
markets and rules of
competition
Expectation of IT
Only 13% view IT as transformational.
N = 237
11

13. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. How is the influence of the CFO changing?
2. What does our CFO study tell us about their
role in business analytics?
3. How do you enable your CFO to be more
strategic through technology?
12

14. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Currently Need Improved
Technology Support
18%
24%
26%
27%
33%
34%
43%
43%
45%
45%
50%
59%
Managing business risk/controls to ensure
accuracy in compliance
Ensuring consistency between transactional data
and analyticals
Understanding and managing the drivers of profitability
or cost of service delivery
Integrating the financial function with the overall enterprise
Creating/maintaining an enterprisewide
view of business relationships
Developing business plans and budgets
Reducing enterprise operating costs
Measuring product and customer profitability
Quality of the data used for business decisions
Creating an effective environment
for sharing relevant information
Ongoing monitoring of business performance
Facilitating analysis and decision making
• Can largely be addressed by improved BI, analytics.
• Emphasize data-driven decision making and transparency.
N = 237
13

15. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
1%
3%
3%
2%
4%
3%
11%
17%
19%
36%
2%
3%
8%
8%
8%
9%
3%
12%
16%
29%
3%
4%
5%
11%
9%
11%
7%
16%
18%
12%
Social networking
Disclosure management solutions
(to work with publisher and establish XBRL tags)
On-demand spplications/software as a service (SaaS)
Reconciliations management applications
Mobile technologies
Governance risk and compliance applications (GRC)
Cloud computing
Business process management (BPM)
Integrated financial management applications/ERP
Business intelligence, analytics,
performance management
Ranked 1st Ranked 2nd Ranked 3rd Sum
77%
54%
45%
22%
22%
21%
21%
15%
10%
6%
Top Technology Initiatives 1 Year From
Now: Financial Organization
N = 237
BI, Analytics and PM Consistent YOY
14

16. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Investment in Business Analytics
16%
18%
22%
30%
35%
43%
45%
54%
Statistical analysis
Predictive modeling
Big data
Customer and product profitability
Data warehouse
Budgeting, planning & forecasting
Financial reporting and consolidation
Performance measurement/scorecard/dashboard
N = 237
Corporate performance management is the top area for investment.
15

17. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Why Do These Trends Exist?
The CFO needs to:
• Report WHAT happened.
• Explain WHY it happened and explain deviations from targets.
• Analyze HOW these results may affect future performance.
• Advise WHICH strategic changes are needed to meet future
performance expectations.
The CFO requires transparency, personalized
decision support; however, these responsibilities
affect the performance of the entire organization.
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18. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. How is the influence of the CFO changing?
2. What does our CFO study tell us about their
role in business analytics?
3. How do you enable your CFO to be more
strategic through technology?
17

19. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Understand the CFO Focus Will Evolve
CFO Focus CFO Needs Financial Info & Tools
Financial
Stewardship
and Compliance
• "Give me transparency
and reporting tools"
• Core finance and
regulatory tools, a "single
version of the truth"
Performance
Optimization
• "Help me work with
LOB heads to tune
the business"
• Advanced analysis,
reporting and portfolio
management tools to
enhance decision making
• Benefits realization
Visionary
Leadership
• "Give me time, and give
me tools to think about
the future"
• Corporate performance
management tools
• Scenario modelling tools
(personalize information
requirements)
18

20. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
What Gets in the Way
The CFO-CIO relationship has the potential to be
a powerful contributor to business success;
however, there are three primary reasons it often
doesn't reach this desired state:
• Poor perceptions of IT performance
• A CFO or CIO with a parochial view
• Failure to invest in the CFO-CIO relationship
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21. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Recommendations
Build the mindset that there are no IT projects —
only business projects.
Implement or increase the maturity of processes
that foster communication (e.g., relationship
management, project management and
advanced technology group).
Become a key strategic partner with finance/CFO
to steer the information technology function.
Education of your CFO on technology must be a
prime focus to improve partnerships.
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22. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Gartner Framework for Cost Optimization
Technology Procurement
Get the best pricing and terms for your purchases
Cost Savings
Identify opportunities to reduce Technology costs
Joint Business and Tech Cost Savings
Implement cost-saving technologies with the business
Business Restructuring and Innovation
Process improvement, reorganization, new methods
Complexity VALUE
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23. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Gartner Framework for Business Analytics
22

24. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
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Gartner Framework for Business Analytics
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25. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Recommended Gartner Research
 A Business Analytics Framework for Finance
Business and Decision Processes
Nigel Rayner (G00234579)
 Impact of the Nexus of Converging Cloud,
Information, Social and Mobile Forces on CPM
Applications and Strategies
Christopher Iervolino (G00237712)
 Align CPM and Analytics Within a Broader Business
Analytics Framework for Best Use
Christopher Iervolino (G00237223)
 Magic Quadrant for Corporate Performance
Management Suites
Christopher Iervolino, and others (G00238924)
For more information, stop by Gartner Research Zone.
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The Digital Tsunami Is Upon Us

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