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The CFO as a data leader

The benefits of data management for finance teams is proving too hard to resist for some companies despite the cost

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How companies scrutinise data to sell more products more efficiently to consumers is nothing new, but data analysis has moved on immeasurably since the faithful loyalty card first hit the British streets.

Once the preserve of commercial teams targeting their external customers, the value of developing one centralised database is being noted by other corporate departments in particular the chief financial officer and the finance team. And now it is as much about providing real-time information internally as well as externally.

New research shows that finance chiefs are focusing their technology priorities for 2012 around the themes of improving the foundation of unified data and being able to provide better analysis as well as easier access to those findings.

In a survey question in Hackett's latest research about top priorities for the finance function, the top agenda point was to get more value from current technology investments.

"Getting the right information to permit quick action can only be accomplished when mechanisms are in place to gather high-quality data, conduct rigorous analysis and make decisions with confidence," according to Hackett's latest research.

"... improving finance's analytical, modelling and forecasting capabilities is a very high priority for 2012," it adds.

An emphatic 69 percent of respondents to Hackett's study said it was a priority to implement business intelligence and analytics applications. Over the past decade business intelligence and data analytics has evolved to such an extent that it is no longer simply about client buying patterns, nor just external clients.

"Until now it's been a tough one to get the CFO to think about it because he has been focused on slice and dice rather than the foundation of data," says Michael Ingemann, a director in CFO services EMEA at Teradata, an enterprise analytic technologies provider.

Simon Doherty, TeradataBut all that is about to change, say experts. Simon Doherty, a former divisional CFO at Natwest and current head of EMEA financial industry at Teradata, agrees. "We are at an inflection point," he says.

"CFOs are very cautious and are waiting for someone else to take the plunge first but there's now some movement," Doherty adds.

Indeed, his instinct is born out of reality. Last October the Co-operative Banking Group began re-engineering its accounting processes installing a centralised Teradata data warehouse as part of its financial transformation programme. The new system integrates credit risk and accounting data into one integrated data warehouse.

And the Co-op is not unique. Other banks are also using data warehousing to offer additional services to customers. In the UK customers of Lloyds bank – also a Teradata client - can now use a type of highly visible dashboard to review their spending patterns, offering customers comparisons, analysis and savings plans to help them better budget in an attempt to ensure customer loyalty and therefore reduce churn through improved data usage.

Commercial advantage and the ability to look deeper into data is without doubt one of the prime drivers for companies adopting data analytics, but post-recession for finance and particularly financial institutions there is another incentive - improved compliance and risk management.

Driving compliance

"[Compliance] is at the top of the minds of CFOs," says Dilip Krishnan, a former director of Teradata's enterprise risk management and capital markets at NCR Teradata and currently a director at Deloitte in the US.

Moreover financial institutions aren't making the same hefty profits as in the past and margins are eroded, which means bottom lines are suffering, so the finance function is being forced to look at its own costs, he explains.


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