CFO Data Needs: How IT Stacks Up

6 Ways To Get More From Data Science, IT

Are CIOs giving their colleagues in finance access to the data they need to make intelligent business decisions? CFOs say they don't have the right data they need to make such educated decisions. Many of them are using outdated and underpowered software to analyze data, according to a recent study. 

This is according to a study commissioned by ERP vendor Epicor Software and conducted by firm Redshift Research Ltd. based on interviews with 1,500 CFOs and other business finance professionals from 11 countries who work at companies with at least 100 employees. Well over half of respondents were from companies with at least 500 employees, and the largest number of respondents worked in organizations with more than 1,000 employees. Most respondents were from manufacturing, services, or retail sectors.

More than a fifth of respondents (28%) said that big data was going to be a top issue for their departments in the next two to three years, with 27% saying that investment in new IT capability will be one of the top issues affecting their departments in the next two to three years. That's probably because they find current IT lacking.

Fully one third of respondents said that planning and forecasting were their major challenges this year. "Gut feeling" dominates the decision-making process for 46% of respondents, who said they lacked the data to make good business decisions. More than four in ten respondents (44%) said that they see mistakes occur as a result of missing or false information. More than a third (37%) said inaccurate data was the biggest cause of mistakes in their decision-making process.

We spend a lot of time at InformationWeek talking about the latest advances in big data and business intelligence, so we were particularly surprised to read in the report that 60% of respondents still use spreadsheets, despite having ERP and other IT systems at their disposal.

Data is a convenient scapegoat for mistakes after the fact. How many times have we heard a business colleague say, "Oh, if I had only known that, I'd have never made this mistake." Sometimes the term inaccurate data is another way of saying hindsight is 20-20. Data isn't supposed to replace management knowledge and experience, but augment them.

During the InformationWeek Conference in April 2015, I gave a talk on the failures of analytics. The room was full of CIOs who shared horror stories of providing data to management, only to have their business colleagues ask them to change the data to match their gut feelings. One CIO was asked to change numbers at every weekly meeting to justify marketing decisions that were already written in stone before the data was even considered. When those decisions backfired, the numbers were always blamed. 

It doesn't take blatant manipulation to create the feeling that data is the cause for a mistake. So, we need to take the numbers with a grain of salt, understanding that there are fallacies with dealing with data that will never make any CFO 100% happy. If they had all the imaginary data in the world to make a perfect decision, data scientists would be gods. Since they don't, any failure can be blamed on whatever the missing variable was.

Here are two stats from the Epicor study that IT can reduce: the 60% of respondents who were still using spreadsheets, and the 46% who said they're not getting enough data. More than half of the CFOs polled (52%) said they make financial decisions collaboratively. Does a spreadsheet seem the best way to do that? When designing your data program, make it a priority for collaborators to visualize, share, and manipulate the data. The user experience is, ultimately, more important than deciding which data points need to be shared. If you think about how the data is going to be presented and used by the CFO's group, the technological decisions to ensure data accuracy and determine types of data you present actually become easier.

The purpose of data is to inform decisions. If the decision, rather than the data, is the focus, you'll find the CFO is a lot happier with the data he or she receives.