breaking the data barrier: lessons from analytically advanced finance organizations

© 2015 IBM Corporation

Breaking the data barrierLessons from analytically advanced Finance organizations

September 2015


The majority of enterprises recognize that data and analytics are transforming their businesses

2 © 2015 IBM Corporation

59% say data and analytics are transforming the way they work

But what about the chief financial officer (CFO) and Finance?

How are data and analytics changing their professions?

Source: IBM Center for Applied Insights, “Inside the mind of Generation D: What it means to be data-rich and analytically driven”, 2014

http://www.ibm.com/ibmcai/Gen_D


Data silos and inadequate tools are making it difficult for Finance to tap the full potential of their enterprise’s data

Questions How important are each of the following areas of responsibility to your enterprise? How effective is your organization in the following areas?

Which of the following changes in finance technology will be most important for improving the finance function’s ability to deliver services effectively?

Sources: 1 Adapted from IBM Institute for Business Value “Pushing the frontiers: CFO insights from the Global C-suite Study”, 2014; 2 Hackett Group, “2014 World Class Finance

EPM Playbook”; 3 Adapted from CFO Research (Sponsored by SAP), “Shaping the Finance Function of Tomorrow: Finance’s Strategic Mandate and the Innovations that will help

them meet it”, February 2014

3

Lack of integrated information is a top barrier to Finance effectiveness1

Reliance on outmoded tools2

71% report

pervasive use of

spreadsheets

for strategic

planning

Top technology gaps for Finance effectiveness3

35%

36%

43%

46%

Using mobile moreeffectively

Increasing use ofcloud

Acquiring newanalytical tools

Better integratingexisting information

systems

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42%

46%

58%

Optimize planning,budgeting and

forcasting

Develop talent in thefinance organization

Drive integration ofinformation across the

enterprise

http://www-935.ibm.com/services/us/en/c-suite/csuitestudy2013/

ftp://public.dhe.ibm.com/software/uk/analytics/finance-forum/The_Hackett_Group.pdf

http://www.sap.com/bin/sapcom/en_gb/downloadasset.2014-02-feb-24-21.shaping-the-finance-function-of-tomorrow-pdf.html


ANALYTICAL CAPABILITY

MA

TU

RIT

Y

n = 271 (Finance organizations with sophisticated analytics ); n= 818 (All other Finance organizations)

Source: Additional data from IBM Center for Applied Insights, “Inside the mind of Generation D: What it means to be data-rich and analytically driven”, 2014

Yet, one group of Finance organizations is overcoming these challenges and significantly advancing their analytics capabilities

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All other Finance organizations:

Descriptive or predictive analytics

75%

Most analytically advanced Finance

organizations:Prescriptive analytics

25%

Three primary

types of

analytics

1. Descriptive: A basic

form of analytics that

describes what

happened

2. Predictive: A more

advanced form of

analytics that forecasts

what may happen in

the future

3. Prescriptive: Sophisticated

analytics that shows the likely

result of a variety of options and

then recommends a course of

action to achieve a desired

outcome



Questions: To what extent are you using each of the following as input to your company's analytic process? ‘already using’, ‘plan on using’, ‘not using’.

Please indicate which of the following capabilities and skill sets are being utilized in your business today.


These Finance organizations are tapping a broad range of data sources with a variety of sophisticated analytics

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Analytics techniques usedData sources used

Tra

dit

ion

al

Ad

van

ce

d

Analytically advanced Finance organizations

All other Financeorganizations



Question: To what extent are you using digital channels in the following ways? ‘already using’, ‘plan on using’, ‘not using’

Source: IBM Analytics; Additional data from IBM Center for Applied Insights, “Inside the mind of Generation D: What it means to be data-rich and analytically driven”, 2014

These analytically advanced Finance organizations are also adept at using mobile and social to improve engagement and efficiency

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Use of digital channels



Question: To what extent is your business deploying each of the following solutions in a cloud environment?


Their enterprises are also relying more heavily on cloud – even for critical transactional systems

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Use of cloud

25%

36%

34%

36%

47%

48%

Transactional systems

Data storage

Web apps and solutions





Questions: To what extent do you agree or disagree that each of the following statements describes your enterprise where 1 is ‘do not agree at all’ and 5 is ‘agree completely’?

How effective is your enterprise in doing the following today? Please rate on a scale of 1 to 5, where 1 is 'not effective at all' and 5 is 'extremely effective’.


The payoff from their approach to analytics, engagement and cloud is reflected in the outcomes they report

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Better decisions Growth Agility

+6%Share of walletpoints

+6%3-year

customer retention points

+6%% of revenue from digital

channels points

2.5xHigh

workforce productivity more likely

18%High operating

efficiencymore likely

+6%Perfect order performance

points

+18%

Making the optimal decision quickly points

+14%

Reacting to new/disruptive

market entrants

points

Analytically advanced Finance organizations vs. Others





The behaviors of analytically advanced Finance organizations provide a blueprint for improving Finance effectiveness

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Establish an integrated

Finance data strategy,

using analytics to

prescribe action

Leverage mobile and

social to improve

information transparency

and accelerate decision

making

Tap into best-of-breed

cloud-based apps,

without major internal IT

investment

breaking the data barrier: lessons from analytically advanced finance organizations

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