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Big Data, Better Vision: The Agile CFO

Operating in a role that traditionally has been seen as a laggard when it comes to adopting new technology, today’s CFO have begun to sign up for cloud financial software at a much faster pace.  CFOs embrace technological changes to make a greater contribution to their company’s future by becoming Agile as well as Tech-Savvy CFOs.

The Adaptive Insights CFO Indicator Report for the first quarter of 2016 finds CFOs are confident they are prepared to meet these changes and are eager to take on a more strategic role in driving their companies forward. The survey of 377 global CFOs shows that confidence grows from their ability to use big data and analytics to plan for multiple scenarios during uncertain economic and stock market conditions.

Big Data and Analytics

A whopping 65 percent of CFOs in the survey believe that having technological and analytical skills is the most important attribute to benefit their contribution. This contrasts with the opinions of their CEOs, who rank those skills lowest (8%) in importance, instead placing global experience at the top (48%). (We will talk more about the divide between CFO and CEO opinions in a future blog.)

Both CFOs (59%) and CEOs (34%) ranked experience with transformation and innovation as second on their list of important attributes, placing them in line regarding the pace of change that CFOs must drive. Big data and analytics will have the biggest effect on their changing role, CFOs believe, as they use the numbers and analysis to create multiple strategic plans to adapt to changing conditions.

“The challenge for CFOs is combining financial data with real-time transactional data and real-time operational data to see the impact of investments,” the study’s executive summary states. “This combination does a better job predicting where the business is going, using leading indicators instead of lagging KPIs.”

Confronting the Data Challenge

Planning for multiple strategies and leveraging analytics to turn real-time data into insights creates confidence in CFOs about their financial forecasts. With 68% of CFOs reporting they were right on or within ±2% of their forecasts for the final quarter of 2015, confidence was even higher for the first two-quarters of 2016, with 85% feeling moderately, very or completely confident in their forecasts.

Experience factors in this planning as half of CFOs with 10 years or more of experience count on planning for multiple scenarios, while only 37% of CFOs with less experience use multiple scenarios. The less-experienced CFOs place more emphasis on collaboration (20%) as compared to the more-experienced (8%).

Embrace Technological Changes

CFOs are relying on analytics software, particularly cloud-based software, to crunch the big data. CFOs expect continued investment in technology to support strategic finance activities. More than half (56%) responded they were very or completely likely to invest in dashboards and analytics, plus 46% were very or completely likely to invest in reporting. Even 35% were very or completely likely to invest in predictive analytics technology.

Increasingly, CFOs expect these technologies to lie in the cloud. CFOs estimate that 33% of their IT infrastructure is SaaS today, and they anticipate that to grow to 60% in four years.

CFOs cited increased collaboration (24%), less reliance on the IT department (21%) and significant cost savings (17%) as the biggest advantages of using SaaS technologies.

Shift from Compliance

Looking to the future, CFOs predict that in the next three years, their top priority will shift from ensuring compliance (currently 93% say that is their top priority) to talent management (78%) and transforming financial data into intelligence to drive growth (77%). The Agile CFO already is preparing for this change by embracing big data and analytics and preparing their teams to adapt to this rapidly changing field.

InCloud360 offers the expertise, industry leading solutions and support to your finance and IT departments as you adapt to these changing situations. Contact us or visit InCloud360.com to learn more about the services we offer.