Presentation: IXN Webinar, CFOs and Big Data. Why they should care and what they should do

CFOs and Big Data: Why Should You Care? What Should You Do?

November 18, 2013

Thomas Kilburn The Consultants Company Camron Allan The Consultants Company Pras Chatterjee SAP Moderator: Chris Herbert, IXN

TODAY’S GOAL

To provide a simple view of the cluttered Big Data

landscape from the perspective of the CFO, and

provide straightforward guidance on some

prescriptive measures that should be considered by CFOs

to ensure that they are proactively identifying and

managing potential challenges and opportunities.

KEY QUESTIONS

What is on the minds of CFOs today?

How does data flow through the Finance function?

How can the CFO assume a leadership role in leading big data initiatives?

Where can they start?

How can finance data be combined to drive value in other areas of the company?

What are the top EPM tools that you will be asked to invest in to drive ROI (e.g. EPM, In-Memory, Mobility)

How does the CFO help to empower other Lines of Business to leverage data?

TODAY’S SPEAKERS

Thomas Kilburn Managing Director, Business Strategy The Consultants Company Thomas has a 20-year track record in working with executives to help them understand analytics and map their needs to capabilities that will deliver value, including most recently, reviewing the impacts that Dodd Frank legislation will have on analytics strategies for US financial institutions. His experience has included senior roles at IBM, SAP, Bell Canada, and a number of software startups. In 2011, he co-founded The Consultants Company, where he leads business strategy.

Camron Allan Managing Director, Technology Strategy The Consultants Company Cam is an acknowledged expert in Finance Analytics and Data Architecture. Having started his career with Clarity Systems, Cam branched out into the world of EPM and Data to include many other technologies and establish a complementary expertise in data architecture. As a sought-after senior consultant, Cam has been consulted on several occasions for projects that were North America firsts for a given technology. In 2011, the same year he co-founded TCC, he was the recipient of an award from the Government of Ontario for his work on the econometric modeling.

Pras Chaterjee Direct of Product Marketing, Enterprise Performance Management SAP As a recognized authority in the area of EPM, Pras has been a prominent contributor to the evolution of this solution area for well over a decade, through senior roles in both strategy and delivery. His perspective is particularly valuable since it extends back into the roots of the current extensive SAP BPC suite through his experience at several best-of-breed software vendors that were ultimately incorporated through acquisition. Pras is a designated CMA (Certified Management Accountant) who has worked in budgeting and forecasting at various prominent multinationals across multiple countries including U.S., Canada, China, Belgium, UK, Brazil, Australia and France.

WHAT WE EXPECT TO COVER

1. The Evolution of the Role of the CFO

2. Big Data: A Quick Primer

3. The Role the “Big Data CFO”

4. What You Can/Should Do Today

PRIMARY RESPONSIBILITIES

Traditional Roles

1. Managing the finances

2. Reducing costs

3. Putting in place the

appropriate controls

A LOOK AT THE PAST DECADE

CFO-CIO Alignment

The “Activist”

Smart Spending

High-Performance Culture

Expanded Leadership

Talent Crunch

Recovery Best Bets

Back to Basics

Management Information

Business Performance

WHO OWNS THE DATA

Who’s Responsible for Data ROI?

HOW FINANCE IS PERCEIVED

TRANSITIONING IT OWNERSHIP

Increasing importance

Keeping the lights on

Transformational

Partners / Enablers

EXPANDING BOUNDARIES

External Data

Other Data

Economic/Market Indicators

Non-Financial Data

Finance

Data Internal Data

Growth

CFOs Have Always had to Incorporate Other Data into their Analysis

THE RISE OF BIG DATA

WHAT’S IN A WORD?

“Big Data is really about new uses and new insights, not so much the data itself,”

DEFINITION

adjective (bigger, biggest)

of considerable size or extent

[attributive] larger than other items of the

same kind

informal on an ambitiously large scale

[attributive] informal doing a specified action

very often or on a very large scale

informal showing great enthusiasm

informal very popular or successful

of considerable importance or seriousness

informal holding an important position or

playing an influential role

verb (bigs, bigging, bigged)

[with object] (big something

up) British informal

noun

(the bigs) North

American informal

“The term itself is vague, but it is getting at something that is real” - Jon Kleinberg, Cornell University.

“Big Data is really about new uses and new insights, not so much the data itself” - Rod A. Smith, IBM Technical Fellow

“I scoffed at it initially. We had to hop on the bandwagon.” - Jim Davis, CMO, SAS

THE X”V”S

Volatility Viscosity Vertical Variability Validity

CAN SMALL DATA BE BIG DATA??

PLUS CA CHANGE…

Finance IT

Data

managementAnalysis

CFO

DO THEY REALLY KNOW WHAT BIG DATA IS?

Top Enterprise Initiatives TODAY o BI, Analytics, Performance Management

55% o Big Data

19% o Cloud

6% o Mobile

%

Top Finance Initiatives TODAY o BI, Analytics, Performance Mgmt

78% o Big Data

0% o Cloud

16% o Mobile

15%

01,0002,0003,0004,0005,0006,0007,0008,000 7,330

2,622 1,561

319 315 95

Jobs in Toronto Nov. 14, 2013 Source: Indeed

KEY FACTORS

1. Extracting Value Integration Data Quality

2. Investment Barriers Technology Cost Culture Time Availability

DATA ASSET MANAGEMENT

Fixed Asset Lifecycle

$14.5B on AT&T’s 2007 financial statements

If it’s not an asset, it’s a cost Intangible assets can

account for 50% of an organization’s value

Operational (OpEx) • How do I maintain it?

Strategic (CapEx)

• How do I get a return (value) from it?

THE GOOD NEWS

WHERE TO FOCUS

People & Culture

Tech Savvy Hybrids

Data-driven Culture

Advanced Technology Groups

Data Management

Data Integration

Data Quality

Data Ownership

Tools

Technologies

In-Memory DB

Hadoop / MPP

Appliances

EPM

Advanced Analytics

Visualization

THINK DATA!!

THINK DATA!! What data are you using? Where does it reside? Is there any data that is not being leveraged? Celebrate data ideas.

WHERE YOU WANT TO GET TO

ANALYTICS MATURITY

CO

MP

ET

IV

E A

DV

AN

TA

GE

Sense & Respond Predict & Act

Raw Data

Cleaned Data

Standard Reports

Ad Hoc Reports & OLAP

Generic Predictive Analytics

Predictive Modeling

Optimization

What happened?

Why did it happen?

What will happen?

What is the best that could happen?

The key is unlocking data to move decision making from sense and respond, to predict and act

STAND ON THE SHOULDERS OF GIANTS

How to Get Started Connect Finance with IT Find a project Lead By Example

Automate month-end close Budgeting / Integrated Planning

Expand Horizons Customer profitability Sales forecasting Marketing

Demonstrate the ROI – trumpet the success Evangelize Data Invite business cases and promote investment Challenge groups to submit requests

Start Smart, and Grow Fast!

THE COMPLETE PICTURE

Volume Variety (Integration)

Velocity (Timeliness)

Validity (Data Quality)

Value (Presentation)

People & Culture ◊ ◊ ◊ ◊ ◊

In-Memory Databases ◊ ◊

Hadoop/MPP ◊ ◊

ETL & DQ Tools ◊ ◊

Performance Management Tools ◊ ◊ ◊

Advanced Analytics ◊ ◊ ◊

Visualization Tools ◊

FINANCIAL PLAN/BUDGET/FORECAST

ABC Company

Profit & Loss Statement

Revenues ……………$5,000

Cost of Sales ……………3,000

Gross Margin …………2,000

Operating ………………………400

Payroll ……………………………300

SG&A ……………………………250

Depreciation ……………………50

Operating Profit ……1,000

Interest Expense ……………50

Net Income ……………$950

Operational Headcount Plans

IT & Project Planning

Sales Planning

S&OP Planning

Department / CC Expense Planning

Capital Planning

Plans impact all areas of the business

INTEGRATED EFFORTS

Corporate

Strategy

Finance

Risk Aware

Financial Planning

Financial Budgeting

Enterprise Strategy

Management

Profitability and Costing

Analysis/COPA/FI

Sales & Marketing

Sales Order Management

Trade Promotion

Management

Campaign Management

Trade Fund Management

NW BW

Operations

Supply Network Planning

Production Planning and

Detailed Scheduling

MRP/Resource Planning

Global ATP/CTP

APO/NW BW

Human Capital

Compensation Planning

Strategic Workforce

Planning

Key Performance Indicators

Resources

Capital Expenditure

Planning

Maintenance

Budgeting

Investment Planning

THE “WHAT IS”

Data Exploration

BI Suite

Dashboards Reporting and Analysis

Based upon all available information:

… From the information and people inside and outside your organization

… Addressing the past, present, future

… Answering the what, how, and why

… With trust

BUSINESS INTELLIGENCE

THE “WHAT COULD BE”

Challenges

Forecasting

Key Influencers

Trends

Anomalies

Relationships

How do historical sales, costs, key performance metrics, and so on, translate to future performance? How do predicted results compare with goals?

What are the main influencers of customer satisfaction, customer churn, employee turnover, and so on, that impact success?

What are the trends: historical / emerging, sudden step changes, unusual numeric values that impact the business?

What are the correlations in the data? What are the

cross-sell and up-sell opportunities?

What anomalies might exist and conversely

what groupings or clusters might exist for

specific analysis?

PREDICTIVE ANALYTICS

THE ELEPHANT(S) IN THE ROOM

ALL-IN-ONE

QUICKER ANSWERS