Despite what should be an ingrained appreciation for data, a new study finds that roughly half of CFOs admit they are making critical business decisions based on gut feelings rather than actual data.
Conducted by Redshift Research on behalf of Epicor Software Corp., the survey of 1,500 financial decision-makers also found that 45 percent of the respondents say that poor data hampers timely decision-making and that inaccurate information is the main cause of organizational mistakes.
That would suggest that in an era when Big Data analytics can make higher quality data available instantly to CFOs, IT services providers should shift the tenor of their conversation with these executives. Instead of merely talking about how to pay for business applications, they should be discussing how they can use these applications.
CFOs using Big Data to make decisions
Most CFOs want to expand their influence across the business. The trouble is that most of them, as the study notes, still rely on spreadsheet applications to keep track of the business. However, very little of the data in those spreadsheets is considered actionable. At best, the spreadsheet merely provides a mechanism for scoring what has already occurred.
Big Data analytics applications are now designed to track events in real time, providing the CFO with information about events while there is still time to affect their business outcome. Just as importantly, most business analytics applications come with visualization tools that make it much easier to discern patterns across complex sets of data.
Obviously, the applications required to provide those capabilities are more complex than a spreadsheet. For that reason, many organizations simply have not had the wherewithal to invest in them. But as analytics applications become yet another service delivered via the cloud, the cost of delivering these capabilities has fallen dramatically.
In fact, many CFOs have already figured this out. The Epicor survey finds that nearly half of the CFOs surveyed have already deployed financial applications in the cloud or plan to do so within the next 12 months. Of course, not every CFO operates in an industry that will allow data to be deployed in a cloud. But even in those scenarios, the cost of deploying a private cloud to support a business analytics application has fallen dramatically over the past two years.
IT service providers can help
While IT organizations often report to the CFO, it doesn’t necessarily follow that they always understand how to master business application software. IT service providers have a unique opportunity to get close to CFOs by showing them a better way to exercise more granular control over the business.
In fact, the survey found that 72 percent of the CFOs that rely on empirical data, not instinct, for decision-making generated greater profits. That alone should pay for the cost of investing in a business analytics application delivered via the cloud.
The degree to which IT services firms will decide to sell business analytics software versus simply training CFOs on how to use it will naturally vary. Whatever the approach, though, having a debt of gratitude from any CFO can never be a bad thing.