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There is growing pressure on CFOs and CIOs to extract more value out of their most unused asset: data. Data that sits in line of business applications, email conversations and social media interactions. The challenge facing senior executives is how to untap the value and where and how to start. This webinar presentation, took place on Monday November 18th, was specifically for CFOs and leaders in Finance, key themes relevant to the office of the CFO that were covered, included: => CFOs and Big Data: What’s on their minds, should they lead and where do they start? => Data in the Finance Function: What are we really talking about? => Top EPM Capabilities CFOs Should be Considering including: In-memory planning, Mobility, Analytics and Integrated Business Planning
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CFOs and Big Data: Why Should You Care? What Should You Do?
November 18, 2013
Thomas Kilburn The Consultants Company Camron Allan The Consultants Company Pras Chatterjee SAP Moderator: Chris Herbert, IXN
TODAY’S GOAL
To provide a simple view of the cluttered Big Data
landscape from the perspective of the CFO, and
provide straightforward guidance on some
prescriptive measures that should be considered by CFOs
to ensure that they are proactively identifying and
managing potential challenges and opportunities.
KEY QUESTIONS
What is on the minds of CFOs today?
How does data flow through the Finance function?
How can the CFO assume a leadership role in leading big data initiatives?
Where can they start?
How can finance data be combined to drive value in other areas of the company?
What are the top EPM tools that you will be asked to invest in to drive ROI (e.g. EPM, In-Memory, Mobility)
How does the CFO help to empower other Lines of Business to leverage data?
TODAY’S SPEAKERS
Thomas Kilburn Managing Director, Business Strategy The Consultants Company Thomas has a 20-year track record in working with executives to help them understand analytics and map their needs to capabilities that will deliver value, including most recently, reviewing the impacts that Dodd Frank legislation will have on analytics strategies for US financial institutions. His experience has included senior roles at IBM, SAP, Bell Canada, and a number of software startups. In 2011, he co-founded The Consultants Company, where he leads business strategy.
Camron Allan Managing Director, Technology Strategy The Consultants Company Cam is an acknowledged expert in Finance Analytics and Data Architecture. Having started his career with Clarity Systems, Cam branched out into the world of EPM and Data to include many other technologies and establish a complementary expertise in data architecture. As a sought-after senior consultant, Cam has been consulted on several occasions for projects that were North America firsts for a given technology. In 2011, the same year he co-founded TCC, he was the recipient of an award from the Government of Ontario for his work on the econometric modeling.
Pras Chaterjee Direct of Product Marketing, Enterprise Performance Management SAP As a recognized authority in the area of EPM, Pras has been a prominent contributor to the evolution of this solution area for well over a decade, through senior roles in both strategy and delivery. His perspective is particularly valuable since it extends back into the roots of the current extensive SAP BPC suite through his experience at several best-of-breed software vendors that were ultimately incorporated through acquisition. Pras is a designated CMA (Certified Management Accountant) who has worked in budgeting and forecasting at various prominent multinationals across multiple countries including U.S., Canada, China, Belgium, UK, Brazil, Australia and France.
WHAT WE EXPECT TO COVER
1. The Evolution of the Role of the CFO
2. Big Data: A Quick Primer
3. The Role the “Big Data CFO”
4. What You Can/Should Do Today
PRIMARY RESPONSIBILITIES
Traditional Roles
1. Managing the finances
2. Reducing costs
3. Putting in place the
appropriate controls
A LOOK AT THE PAST DECADE
CFO-CIO Alignment
The “Activist”
Smart Spending
High-Performance Culture
Expanded Leadership
Talent Crunch
Recovery Best Bets
Back to Basics
Management Information
Business Performance
WHO OWNS THE DATA
Who’s Responsible for Data ROI?
HOW FINANCE IS PERCEIVED
TRANSITIONING IT OWNERSHIP
Increasing importance
Keeping the lights on
Transformational
Partners / Enablers
EXPANDING BOUNDARIES
External Data
Other Data
Economic/Market Indicators
Non-Financial Data
Finance
Data Internal Data
Growth
CFOs Have Always had to Incorporate Other Data into their Analysis
THE RISE OF BIG DATA
WHAT’S IN A WORD?
“Big Data is really about new uses and new insights, not so much the data itself,”
DEFINITION
adjective (bigger, biggest)
of considerable size or extent
[attributive] larger than other items of the
same kind
informal on an ambitiously large scale
[attributive] informal doing a specified action
very often or on a very large scale
informal showing great enthusiasm
informal very popular or successful
of considerable importance or seriousness
informal holding an important position or
playing an influential role
verb (bigs, bigging, bigged)
[with object] (big something
up) British informal
noun
(the bigs) North
American informal
“The term itself is vague, but it is getting at something that is real” - Jon Kleinberg, Cornell University.
“Big Data is really about new uses and new insights, not so much the data itself” - Rod A. Smith, IBM Technical Fellow
“I scoffed at it initially. We had to hop on the bandwagon.” - Jim Davis, CMO, SAS
THE X”V”S
Volatility Viscosity Vertical Variability Validity
CAN SMALL DATA BE BIG DATA??
PLUS CA CHANGE…
Finance IT
Data
managementAnalysis
CFO
DO THEY REALLY KNOW WHAT BIG DATA IS?
Top Enterprise Initiatives TODAY o BI, Analytics, Performance Management
55% o Big Data
19% o Cloud
6% o Mobile
%
Top Finance Initiatives TODAY o BI, Analytics, Performance Mgmt
78% o Big Data
0% o Cloud
16% o Mobile
15%
01,0002,0003,0004,0005,0006,0007,0008,000 7,330
2,622 1,561
319 315 95
Jobs in Toronto Nov. 14, 2013 Source: Indeed
KEY FACTORS
1. Extracting Value Integration Data Quality
2. Investment Barriers Technology Cost Culture Time Availability
DATA ASSET MANAGEMENT
Fixed Asset Lifecycle
$14.5B on AT&T’s 2007 financial statements
If it’s not an asset, it’s a cost Intangible assets can
account for 50% of an organization’s value
Operational (OpEx) • How do I maintain it?
Strategic (CapEx)
• How do I get a return (value) from it?
WHERE TO FOCUS
People & Culture
Tech Savvy Hybrids
Data-driven Culture
Advanced Technology Groups
Data Management
Data Integration
Data Quality
Data Ownership
Tools
Technologies
In-Memory DB
Hadoop / MPP
Appliances
EPM
Advanced Analytics
Visualization
THINK DATA!!
THINK DATA!! What data are you using? Where does it reside? Is there any data that is not being leveraged? Celebrate data ideas.
WHERE YOU WANT TO GET TO
ANALYTICS MATURITY
CO
MP
ET
IV
E A
DV
AN
TA
GE
Sense & Respond Predict & Act
Raw Data
Cleaned Data
Standard Reports
Ad Hoc Reports & OLAP
Generic Predictive Analytics
Predictive Modeling
Optimization
What happened?
Why did it happen?
What will happen?
What is the best that could happen?
The key is unlocking data to move decision making from sense and respond, to predict and act
STAND ON THE SHOULDERS OF GIANTS
How to Get Started Connect Finance with IT Find a project Lead By Example
Automate month-end close Budgeting / Integrated Planning
Expand Horizons Customer profitability Sales forecasting Marketing
Demonstrate the ROI – trumpet the success Evangelize Data Invite business cases and promote investment Challenge groups to submit requests
Start Smart, and Grow Fast!
THE COMPLETE PICTURE
Volume Variety (Integration)
Velocity (Timeliness)
Validity (Data Quality)
Value (Presentation)
People & Culture ◊ ◊ ◊ ◊ ◊
In-Memory Databases ◊ ◊
Hadoop/MPP ◊ ◊
ETL & DQ Tools ◊ ◊
Performance Management Tools ◊ ◊ ◊
Advanced Analytics ◊ ◊ ◊
Visualization Tools ◊
FINANCIAL PLAN/BUDGET/FORECAST
ABC Company
Profit & Loss Statement
Revenues ……………$5,000
Cost of Sales ……………3,000
Gross Margin …………2,000
Operating ………………………400
Payroll ……………………………300
SG&A ……………………………250
Depreciation ……………………50
Operating Profit ……1,000
Interest Expense ……………50
Net Income ……………$950
Operational Headcount Plans
IT & Project Planning
Sales Planning
S&OP Planning
Department / CC Expense Planning
Capital Planning
Plans impact all areas of the business
INTEGRATED EFFORTS
Corporate
Strategy
Finance
Risk Aware
Financial Planning
Financial Budgeting
Enterprise Strategy
Management
Profitability and Costing
Analysis/COPA/FI
Sales & Marketing
Sales Order Management
Trade Promotion
Management
Campaign Management
Trade Fund Management
NW BW
Operations
Supply Network Planning
Production Planning and
Detailed Scheduling
MRP/Resource Planning
Global ATP/CTP
APO/NW BW
Human Capital
Compensation Planning
Strategic Workforce
Planning
Key Performance Indicators
Resources
Capital Expenditure
Planning
Maintenance
Budgeting
Investment Planning
THE “WHAT IS”
Data Exploration
BI Suite
Dashboards Reporting and Analysis
Based upon all available information:
… From the information and people inside and outside your organization
… Addressing the past, present, future
… Answering the what, how, and why
… With trust
BUSINESS INTELLIGENCE
THE “WHAT COULD BE”
Challenges
Forecasting
Key Influencers
Trends
Anomalies
Relationships
How do historical sales, costs, key performance metrics, and so on, translate to future performance? How do predicted results compare with goals?
What are the main influencers of customer satisfaction, customer churn, employee turnover, and so on, that impact success?
What are the trends: historical / emerging, sudden step changes, unusual numeric values that impact the business?
What are the correlations in the data? What are the
cross-sell and up-sell opportunities?
What anomalies might exist and conversely
what groupings or clusters might exist for
specific analysis?
PREDICTIVE ANALYTICS
THE ELEPHANT(S) IN THE ROOM
ALL-IN-ONE
QUICKER ANSWERS