Today’s fiercely competitive global economy demands more from finance organizations than ever before. In addition to fast and accurate planning and forecasting, finance is being challenged with managing growing data volumes, evolving regulations and compliance requirements, and the need to deliver real-time insights to senior staff. Progressive CFOs and finance executives are increasingly leveraging transformative technologies to enhance the effectiveness of their organizations—driving new efficiencies, innovation and a competitive advantage in the business.

The article will examine three technologies transforming finance—Big Data, the cloud and mobile computing—and how the office of the CFO can incorporate these technologies to better forecast and plan for profitable growth, report with confidence and accelerate business value for the organization.

 

Harnessing Big Data

The topic of Big Data clearly reached a tipping point in 2012 and continues to be a hot topic in 2013. But what does it actually mean and why is an appreciation of Big Data so important for the office of the CFO?

Finance executives are certainly accustomed to dealing with mounting volumes of information generated from internal systems. But Big Data takes “large” to a new level—terabytes, petabytes or even more. According to Gartner, the volume of worldwide information is growing annually at a minimum rate of 59 percent annually, or to put it another way, all of the world’s data in existence today will have doubled in less than two years. But Big Data is characterized by much more than just volume. The so called “three Vs” of Big Data neatly sum up its characteristics: volume, velocity and variety.

The explosive growth in data volumes is being driven by a number of factors, including transactional software applications, websites, sensors and meters, as well as mobile devices. But the variety of data being generated is also changing with “unstructured” data such as commentary and other text-based information created in social media, blogs, e-mails, document management systems and websites. And the velocity is increasing with data being generated in real-time, by a growing number of users and machines. The big challenge is, how does an organization extract value from all of the noise being created by Big Data?

With the right tools and resources, getting value from Big Data is possible, and there are growing examples of this. Even in the office of the CFO there are signs that Big Data could turn into big insights. For example, the combination of unstructured social analytics and financial forecasting could lead to a new generation of forecasting techniques in which forecasts are informed by customer sentiment about products, customers and campaigns. But marshalling and tuning data on this scale requires specialized information discovery tools that can build effective database structures yet shield end users from complexity.

The key to big advances from Big Data will be the ability to meld the ease of use of traditional BI with the new technologies necessary to manage such large volumes. There are also concerns around the availability of skills to manage, analyze and interpret Big Data.

So Big Data is a phenomenon that the CFO cannot ignore. The broadening of information requirements and initiatives such as integrated reporting will entail the handling of more data sources and even more information. Big Data might not have arrived in the finance function just yet, but the writing is on the wall. This is a good time for CFOs to huddle with their CIOs to discuss and develop a strategy for managing and leveraging Big Data for competitive advantage.

 

Leveraging the Power of Cloud Computing

According to Gartner Research, 80 percent of Fortune 1000 enterprises had paid for cloud computing services by the end of 2012. In these austere times, the ability to save costs (a big driver for cloud computing) is particularly welcome, but as some organizations are discovering, the cloud offers transformational qualities for certain business processes that extend well beyond the simple advantages originally envisioned by the transition to the cloud.

The advantages of cloud-based processing are well established, including: reducing up-front investments in hardware and IT infrastructure for applications; accelerating deployment cycles for new applications; and offloading the obligations of managing and supporting applications to a third party. The cloud subscription model also removes a layer of cost uncertainty and the ability to “pay only for what you need” allows organizations to avoid the high upfront costs of on-premise solutions (which are fixed) and to align computing costs more sympathetically with growth.

Yet more vitally, the cloud holds out the prospect of not just cost savings but the ability to transform processes. Take, for example, the budgeting process. For historic reasons—principally systems performance, high data volumes and local needs—it has been common practice to distribute budgeting systems on a regional or divisional basis in order to spread the processing burden. But the high use of spreadsheets and number of physical layers in this process hierarchy can have a profoundly detrimental effect on the efficiency of data capture, budget modeling, data consolidation, scenario planning and reporting.

By contrast, cloud-based budgeting applications offer the potential for a single centralized budget model for the whole organization. Rather than deploying separate instances of the budgeting system to, say, different geographical regions, every budget holder is able to access the same model at any time utilizing just a web browser on a PC or laptop. This provides an ideal environment for collaboration and negotiation, driving up data quality, forecast accuracy and control while simultaneously driving down the length of budgeting and forecasting cycles.

The ability to affordably support high levels of users encourages knowledge sharing and helps to break down functional silos. Furthermore, the coalescence of cloud and mobile computing offers advantages such as the ability to cater easily to mobile workers and to offer richer integrated business intelligence (BI) capability for busy executives on the move.

Cloud has undeniable advantages but it is not for everyone. As the number of cloud-based applications proliferate so do the challenges of integration between different vendors’ offerings, especially where processes straddle the cloud and the “on-premises” world. Added to which not all cloud vendors encourage customization.

Nonetheless, the transformative potential of the cloud is appealing. Even for core financial processes such as accounting and budgeting, it offers new ways of working that would be economically or operationally impractical in the on-premises world. It is this ability to elevate the capabilities of a traditional business process to new heights that is so compelling. The discussion is no longer about the wisdom of moving applications to the cloud but how to fully leverage its transformational qualities.

 

Empowering Users with Mobile Capabilities

Mobility is moving up the CFO’s and CIO’s agendas in terms of its importance to their company’s success over the next three years. By any measure, mobile technology will be a game-changer, but for the unwary there are also profound technical, economic, cultural, legal and ethical challenges associated with the transition to a more fluid and inherently less controllable environment.

The opportunities afforded by mobile technology are undeniable. They range from pure convenience, i.e., the ability to retrieve information from corporate systems at anytime and from anywhere on a mobile device, to a more data-rich society in which important decisions can be made on-the-fly. We are approaching a new era of mobile BI in which Gartner says the mobile device is not just seen as the “endpoint” of an information flow, but can equally be considered a data generation point—using location-specific information and images to enrich corporate information about people, customers, suppliers, products and personnel. Enterprise software vendors are also moving beyond simple information delivery via mobile devices, to offering workflow and approvals as well as data entry for tasks such as sales forecasting or travel & expense management.

The ability to have information literally at one’s fingertips is alluring. It’s a natural extension of the mobile phone phenomenon in which executives and employees are never out of touch, even when on vacation. Gartner adds that by 2014, 90 percent of companies will support their applications on personal mobile devices. In fact the analyst firm says that by 2015, mobile application development projects will outnumber native PC projects by a ratio of 4:1. And with mobile technology accounting for around 30 to 50 percent of the average company’s IT budget, CFOs will undoubtedly feel the need to be intimately involved in investment decisions.

Yet, despite the apparent inevitability of a mobile dominated landscape, there are significant hurdles to overcome. In a scenario reminiscent of the early days of the microcomputer, the IT function will need to contend with a multitude of operating systems (iOS, Android, Microsoft, BlackBerry and so on) with widely different features and capabilities. Trade-offs may need to be made about which devices to support, which in turn will present difficulties in the “Bring Your Own Device” (BYOD) world in which the majority of the devices connected to corporate data will be supplied by employees themselves.

However, the BYOD concept ushers in more troubling issues relating to data privacy, confidentiality and security – issues that are always top of mind for CFOs. In fact, CFOs recently polled by Oracle cited the lack of a mobile device management policy as the top barrier for rolling out a mobile business intelligence project. That is why CFOs and their IT counterparts need to need to consider policies which govern the use of corporate applications, the storage of corporate data, accessibility to employees’ private data and the conditions in which data can be wiped clean remotely, for example, when a device is stolen.

 

Call to Action

So what’s the best way for finance executives to ensure that their organizations are staying ahead and leveraging Big Data, cloud and mobile technology to create efficiencies and competitive advantage? The first step is to figure if and where these technologies are already being used in the organization. Work with your IT and line-of-business executives to take an inventory of what cloud and mobile applications are already in use and look for opportunities to define some standards and leverage them in other areas.

New applications are great opportunities to evaluate the potential of cloud-based deployment to speed time to benefit and reduce TCO. Look for ways to augment existing applications with mobile information delivery. Many of today’s BI tools and platforms offer mobile information delivery capabilities that can help you empower managers with better, faster and more usable information.

Think about whether your organization can tap into Big Data to improve your planning and forecasting process. This may require some new technologies for capturing, organizing and discovering the value in this data, as well as staff with the right skill sets, but the payoff can be significant.

Big Data, cloud and mobile technologies can help your organization forecast and plan for profitable growth by better understanding customer sentiment, improve agility and decision-making by empowering managers with better intelligence about the business, reduce costs and accelerate business value by delivering new applications more rapidly.

 

John O’Rourke is vice president of product marketing with Oracle Corp.