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The Aligned Agenda -Insights From Cfo And Cio Studies
1. The Aligned Agenda Insights from the Global CFO and CIO Studies IBM Institute for Business Value
2. The IBM Global CIO and CFO studies are part of our C-Suite series 2005 Study 2006 Study 2004 Study 2008 Study 2007 Study 2008 Study 2005 Study 2003 Study Total Interviews: 450 Face-to-Face: 450 Total Interviews: 889 Face-to-Face: 267 Total Interviews: 1230 Face-to-Face: 619 Total Interviews: 1130 Face-to-Face: 1100 Total Interviews: 404 Face-to-Face: 337 Total Interviews: 456 Total Interviews: 320 Face-to-Face: 320 Total Interviews: 765 Face-to-Face: 506 2010 Study Total Interviews: 1917 Face-to-Face: 1485 CFO Studies CEO Studies CHRO Studies Total Interviews: 1564 Face-to-Face: 1564 2010 Study IBM Institute for Business Value 2009 Study Total Interviews: 2598 Face-to-Face: 2598 CIO Studies 2009 Study Total Interviews: 393 Face-to-Face: 367 CSCO Studies
6. Long term trends Top three most important forces that impact your IT-organization over next 3 years High growth CIO emphasize business model change; budget constraints may constrain low growth CIOs Medium growth Low growth High growth IBM Institute for Business Value
7. Successful CIOs blend three pairs of roles that seem contradictory, but are actually complementary By integrating these three pairs of roles, the CIO makes innovation real, raises the ROI of IT and expands business impact IBM Institute for Business Value Able Pragmatist Savvy Value Creator Relentless Cost Cutter Collaborative Business Leader Inspiring IT Manager Making Innovation real Raising the ROI of IT Expanding business impact Insightful Visionary
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9. The priorities on the CIO agenda clearly demonstrate a broad business-oriented vision Ten most important visionary plan elements Interviewed CIOs could select as many as they wanted IBM Institute for Business Value Source: IBM Global CIO Study 2009; n = 2345 High growth Low growth
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12. Each CIO role was scored based on responses to a discrete set of questions. The average overall score for each role was plotted within the three performance categories (High-, Medium- and Low-growth). With a possible range of 0 to 10, actual scores fell between 3 and 7. Using advanced statistical analysis, we profiled CIOs on the basis of six axes and plotted their unique characteristics Medium growth Low growth High growth IBM Institute for Business Value
13. Industry characteristics and dynamics have a substantial influence on the overall behavior of CIOs Consumer products Banking and financial markets Healthcare Retail
19. The Global CFO Study 2010 is the largest known CFO-level study of its kind with over 1,900 participants Geography Sector Organization Size Title Scope of Role Asia Pacific 27% EMEA 42% Americas 31% Public 13% Communications 13% Industrial 25% Distribution 28% Financial Services 20% BU / Program Area, 5% Country 27% Region 11% Enterprise / Global 57% Others 8% SVP / Controller / Treasurer 14% CFO / Deputy CFO / Director 78% <=$500MM 25% $501MM to $1B 15% >$1B to $5B 28% >$5B to $10B 11% >$20B 14% >$10B to $20B 7% CFO Study 2010 Firmographics N = 1,910 Source: IBM Institute for Business Value, The Global CFO Study 2010 Geography = Country of Company Headquarters Overview Others 1%
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21. N = 1,834 Note: Executives asked: How important to your Finance organization are each of following areas of responsibility? and How effectively do you think your Finance organization is performing in each of those areas? And Please rank your top 3. Importance defined as enterprises selecting [5] Critical and [4] on a 5-point scale where [5] Critical and [1] Unimportant. Effectiveness defined as enterprises selecting [5] Very Effective Critical and [4] on a 5-point scale where [5] Very Effective and [1] Ineffective Source: IBM Institute for Business Value, The Global CFO Study 2010 CFO priorities reveal a shift in focus from Core Finance to more Enterprise Focused activities, but ability to execute lags IBM Institute for Business Value 34% 28% 26% 21% 16% 9% 28% 35% 23% Core Finance Enterprise Focused CFO Agenda: Importance vs. Effectiveness 2 Gap 1 3 Importance Effectiveness Driving integration of information across the enterprise Providing inputs into enterprise strategy Supporting / managing / mitigating enterprise risk Driving enterprise cost reduction Strengthening compliance programs and internal controls Driving Finance function cost reduction Executing continuous Finance process improvements Developing your people in the Finance organization Measuring / monitoring business performance Rank 0% 20% 40% 60% 80% 100% 52% 61% 55% 83% 49% 84% 59% 75% 62% 85% 52% 80% 59% 80% 39% 73% 51% 77%
22. A broader enterprise focused role requires core Finance efficiency be in place to reliably support business insight and decision making Introduction Addressing the Broader Enterprise Focused Role of Finance Source: IBM Institute for Business Value, The Global CFO Study 2010 Finance Efficiency Business Insight Demands on Finance Help drive enterprise cost reduction Support risk management Partner in strategy and value creation Improve access to and reduce cost of capital Provide performance insight and anticipate Finance Capabilities Needed
23. Using Regression analysis, we developed a model that segmented participants into four profiles based on capabilities and maturity Finance Profiles Source: IBM Institute for Business Value, The Global CFO Study 2010 Introduction 23% 12% 32% 33%
24. The study revealed the three most prevalent things companies with higher Finance Efficiency have done to improve Finance Efficiency Accelerators Source: IBM Institute for Business Value, The Global CFO Study 2010 CFO Study 2010 Overview
25. The study revealed the three most prevalent things companies with higher Business Insight have done to improve Business Insight Accelerators Automate Production of Operational Metrics Source: IBM Institute for Business Value, The Global CFO Study 2010 Establish Non-Financial Data Standards Automate Production of Financial Metrics Business Insight
26. Value Integrators drive the broadest improvements in data and analytics, process, technology and people N = 1,454 to 1,469 Note: Defined as those enterprises selecting [5] To a very large extent or [4] on a 5-point scale where [5] To a very large extent and [1] Not at all Source: IBM Institute for Business Value, The Global CFO Study 2008, 2010 Value Integrator Streamlined information delivery Percent Adopted Electronic data capture at the source Systematic data cleansing and auditing Business Risks in Performance Reporting Employed Functional Best Practices Utilized automated workflow tools Measurement & monitoring of processes Common reporting platform Common planning platform What do Value Integrators do differently? % more 32% 35% 31% 22% 31% 25% 41% 31% 22% 0% Value Integrators 100% 80% 60% 20% 40% Constrained Advisors Disciplined Operators
27. Those that excel in either dimension have closed the effectiveness gap, with the Value Integrator closing the gap most consistently N = 1,454 to 1,469 Source: IBM Institute for Business Value, The Global CFO Study 2008, 2010 Value Integrator Effectiveness Across the Full CFO Agenda Driving integration of information across the enterprise Providing inputs into enterprise strategy Supporting / managing / mitigating enterprise risk Driving enterprise cost reduction Strengthening compliance programs and internal controls Driving Finance function cost reduction Executing continuous Finance process improvements Developing your people in the Finance organization Measuring / monitoring business performance Percent more effective than baseline 100% 80% 60% 0% 20% 40% Disciplined Operators 19% Better Constrained Advisors 33% Better Value Integrators 59% Better Scorekeepers (Baseline) 0% 120% Value Integrators Constrained Advisors Disciplined Operators Scorekeepers
29. Comparing the agenda of each, we see remarkable alignment between CIO and CFO priorities IBM Institute for Business Value Source: IBM Global CIO Study 2009; IBM Global CFO Study 2010 A focus on these priorities turns Strategy into execution. 77% 85% 83% 86% 73% 73% 70% 75%
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34. The Aligned Agenda Provocative Questions How can these two collaborate to build a winning business case for driving change? How can processes be standardized across an enterprise that has multiple, sometimes very different businesses? How accurate are your crucial forecasts and analyses, such as plans and forecasts? How confident are you that your company is focused on the right business metrics - the ones that truly measure business performance and insight? Business Intelligence & Analytics Collaboration What is the Enterprise Philosophy on process standards? How can processes be standardized across an enterprise that has multiple, sometimes very different businesses? Who owns risks and which ones? What are the enterprise ’ s key risk factors? Risk and Compliance Business Process Management
35. More detail can be found at our external websites http://www.ibm.com/voiceoftheCIO http://www.ibm.com/cfostudy
Hinweis der Redaktion
Between January and April 2009, we spoke with more than 2500 CIOs . These CIOs represent different sizes of organizations in 78 countries and 19 industries. We conducted these interviews in their offices. These one-hour, face-to-face conversations, along with statistical and financial analysis, made clearer the changing demands on CIOs. Not content to be known only as consummate IT experts or perpetual seekers of savings, CIOs around the globe are redefining their role. This report contains the CIO’s voice – directly from them, in their words, about the challenges they face and the goals and vision they have. In addition to the vast amount of information we gathered as part of these one-on-one interviews, we also incorporated financial data into our analysis For our financial analysis, we used 2004-2007 Profit before Tax (PBT) growth, relative to peers in their industries, to associate organizations with one of three growth levels: High, Medium or Low. For organizations where this information was not available, we used statistical correlation to assign levels, based on closest overall similarity of answers. In the study – we refer to CIO’s in high growth organizations as High-growth CIO’s and those in low-growth organizations as Low-growth CIO’s. As a point of reference, Low growth does not infer poor performance , it simply indicates that the context in which the CIO operates is significantly different, compared to High-growth CIOs. So, CIO comparisons reflect their environment, not their performance
On any given day, CIOs are poised for the unexpected, leading an IT organization that solves a myriad of problems for customers, both internal and external. As a result, the voice of the CIO is being heard in new ways – as CIOs are increasingly recognized as full-fledged members of the senior executive team. Although this has been discussed in the past as something CIOs should do, CIOs have told us, in their own words, that in many cases they are part of the senior executive team Successful CIOs are much more actively engaged in setting strategy, enabling flexibility and change, and solving business problems, not just IT problems . They spend an impressive 55% of their time on activities that spur innovation. But CIOs told us that they can only turn more attention to new technology ideas after addressing current IT needs. And they spend the remaining 45% of their time on more traditional CIO (IT related) tasks related to managing the ongoing technology environment . This includes reducing IT costs, mitigating enterprise risks and leveraging automation to lower costs elsewhere in the business. In carrying out this broad range of tasks, CIOs universally acknowledge that some of their most important objectives too often seem to clash
In order to be successful, CIOs are master jugglers, performing multiple and often competing roles: visionary and pragmatist value creator and cost cutter business leader and IT manager To address this complexity, CIOs focus on enabling three things within their organizations: INNOVATION: CIOs focus on Making Innovation Real INSIGHT: More than ever, CIOs are focusing on delivering insights to Raise the ROI of IT COLLABORATION: As business leaders, CIOs are focusing on collaboration to Expand Business Impact The realities facing each individual CIO influence how they manage their goals and their supporting roles at any given time. Through the course of this presentation, we share with you the voices of many CIOs and what they are doing to achieve their primary goals
CIOs are seen as Insightful Visionaries who bring innovation to the forefront . They inject leading-edge technologies into products and services to foster the future growth and profitability of the enterprise . (Remember – High growth and low growth designations are not an indicator of individual performance, but the different context that CIOs operate within) High-growth CIOs exert a wide span of organizational influence. Across our sample, CIOs spend about 20 percent of their time creating and generating buy-in for innovative plans . But High-growth CIOs do certain things more often than Low-growth CIOs: They co-create innovation with the business, proactively suggest better ways to use data and encourage innovation through awards and recognition . Notes related to charts: To innovate, High-growth CIOs actively integrate business and IT across the organization 94 percent more often than Low-growth CIOs. High Growth CIOs spend 40% more time reaching out and working with the business to co-create and push innovation forward. This indicates a much higher degree of pro-activeness from the CIO and his team High growth CIOs are members of the most senior strategic team approximately 65% of the time – 35% more than CIOs in low growth companies. CIOs also tend to be Able Pragmatists - they do what needs to be done, and they do it efficiently. This is a natural counterpart of the Insightful Visionary role. Pragmatic CIO’s clearly recognize that consistent, successful and dependable delivery of existing commitments lies at the heart of every successful IT organization. Even as they turn an eye toward the future, High-growth CIOs know they must be both practical and vigilant in meeting everyday IT demands. The Visionary may see a new opportunity, but it takes a Pragmatist to seize it. Some data points from our analysis: In order to focus on more transformational, forward-thinking aspects of the business , 56 percent of High-growth CIOs use third-party business or IT services, versus 46 percent of Low-Growth CIOs. Organizations keep looking for new ways to improve productivity – strengthening the lines of communication within the enterprise, as well as with business partners and external customers. Strong emphasis on collaboration is far more evident among High-growth CIOs High-growth CIOs spend the greatest allocation of time and budget on new technology and business initiatives. They devote 87 percent more of their time to enabling the business and corporate vision than Low-growth CIOs. By contrast, Low-growth CIOs spend 74 percent more time than High-growth CIOs engaged in activities related to providing core technology services. Pragmatic CIOs transform the organizational mindset when it comes to collaborating in new ways, particularly with external customers. High-growth CIOs actively use collaboration and partnering technology within the IT organization 60 percent more often than Low-growth CIOs. Even more impressive, High-growth CIOs used such technology for the entire organization 86 percent more often than Low-growth CIOs. Finally, High-growth CIOs leverage the capabilities of third party business and IT service providers 22% more than Low-growth CIOs. . As such it improves their business agility and allows them to focus on core activities
CIOs told us of a broad array of initiatives they are pursuing, and those they have on their radar screen. These initiatives are not related only to IT, but are business oriented plans to enhance their organization’s competitiveness and performance . When we asked CIOs to identify their visionary plans for enhancing their enterprise’s competitiveness, business intelligence and analytics was the top answer, selected by 82 percent of our sample. Many CIOs agreed that they seek information-led innovation based on treating information as an asset. CIOs’ next most popular answer about visionary plans was virtualization , cited by 76 percent of CIOs. (NOTE: Virtualization is a technique that encapsulates the characteristics of resources from the way in which other systems interact with those resources. From an application point of view it is the separation of an application from the underlying operating environment, which improves portability, compatibility, and manageability of the application.) Rounding out the top three is risk management and compliance (71 percent). CIOs reiterated the importance of mitigating risk, and many described their organizations as risk-averse Also note that concepts such as SOA/Web services and Business process Management, fairly new concepts within the last 5 years for most CIOs, have obtained a firm position in the top innovation list
CIOs become Value Creators when they work with the business to enable superior customer experiences. These Savvy Value Creators derive greater value – both for external customers and the enterprise – by fully leveraging critical information and data. Many CIOs echoed the importance of extracting data’s value as fully as possible . High-growth CIOs create value for the business in many ways, especially through improved customer interactions. In the next five years, 87 percent of High-growth CIOs expect to seek customers’ active input and interaction , compared to 70 percent of Low-growth CIOs. One way CIOs are contributing is by helping the business cope with ever-increasing amounts of information. High-growth CIOs proactively craft data into actionable information 61 percent more often than Low-growth CIOs In the next five years, CIOs expect significant value to come from more emphasis on collaborative relationships with customers. Sixty-eight percent of High-growth CIOs anticipate their customer interactions will feature world-class integration and transparency , compared to just 44 percent of Low-growth CIOs CIOs overall spend around 14% of their time taking out costs. In doing so, a lot of emphasis is being put on centralization and standardization, Three quarters of all CIOs forsee a centralized infrastructure within 5 years. More surprising is the fact that half of the Low-growth CIOs and 61% of High-growth CIOs anticipate standardized and low cost business processes to be a reality within their organization. Repeatability and simplicity seem to be more important then the unique character of the process itself.
As a Collaborative Business Leader, High-growth CIOs receive high marks for their technology contribution to the business almost 50% more often than Low-growth CIOs. Overall the new voice of the CIO is heard via their active involvement in strategy related work, with High Growth CIOs more involved in all of its dimensions: define the strategy – present and defend the strategy and deciding on it. Reaching out to the business and being deeply involved in strategic decisions does not mean that the credibility of the CIO within the own department is no longer relevant. A CIO has to be inspirational to his/her own team. One of the frequently identified activities, among others, is setting up centers of excellence. High-growth CIOs tend to do this 69% more often then Low-growth CIOs.
Stretching as an insightful visionary Push business and technology integration. Offer solutions for colleagues’ business dilemmas, even when the answer is not directly IT-related Champion innovation. Explain how new processes and technologies can deliver more value to both internal and external customers Extend CIO influence . Volunteer to help define the overall business vision and strategy and take on other non-technology leadership roles Stretching as an able pragmatist Enable the corporate vision . Increase the flexibility and efficiency of infrastructure and applications to support ongoing business changes Make working together easy . Provide better partnering and collaboration technologies so internal and external customers stay connected and relationships are more productive Concentrate on core competencies . Improve business agility by accessing business services, specialty technologies or IT services through third parties
Stretchingas a savvy value creator Make the data “sing”. Surprise the business with unexpected ways to meet customer needs and otherwise profit from enterprise data Reach customers in new ways . Keep looking for more profitable paths to the end-customer Enhance integration and transparency . Address growing end-customer demands by proposing leading-edge technologies to create “one version of the truth” Stretching as a relentless cost cutter Standardize to economize . Simplify, then standardize those business processes that are deemed necessary—also work to standardize and reuse IT components Centralize the infrastructure . Consolidate and use third-party services whenever it makes financial and business sense, particularly to gain economies of scale Keep cost reduction a top priority. Remain diligent and creative in discovering new ways to lower enterprise costs related to technology
Stretching as a collaborative business leader Know the business. Improve your understanding of the organization’s most pressing business problems Get involved with business peers in non-IT projects. Capitalize on opportunities to expand responsibilities beyond IT to directly influence the business agenda Present and measure IT in business terms. Engender shared responsibility for business success through joint performance metrics based on business outcomes Stretching as an inspiring IT manager Cultivate truly extraordinary IT talent . Identify and grow savvy technologists into thought leaders who can expand the impact of IT Lead the IT forces . Position yourself as a strong leader who makes attainment of existing IT service commitments the top priority Enhance the data . Devote as much attention to data accuracy, availability and integration as to data security
Our research identified and validated that CIOs are performing (continuously) a balancing act between apparently opposite roles. Successful CIOs know how to blend and give focus wherever needed. Given the dynamic nature and the increasing speed at which change occurs in an organization, we anticipate CIOs will rebalance their focus on multiple roles on an ongoing basis. This will assist in continuing to make innovation real, raise the ROI of IT, and expand business impact.
We surveyed over 1,900 CFO’s and Senior Finance executives. This is the largest known study of its kind on the planet. Nearly 1,500 of these interviews were conducted in 60-minute face-face interviews, and the balance through online surveys, conducted in collaboration with the Economist Intelligence Unit (EIU). There is strong representation across all geographies, company sizes and industries. Perhaps most important to this study is the seniority and scope of role of our participants. 78% of participants were senior Finance Executives such as CFOs, Deputy CFO’s and Directors, Over 57% representing their Enterprise as a whole, as opposed to a business unit, region or country. This predominantly Senior level and Enterprise-wide representation suggests that our findings carry the perspective of the most senior finance executives in companies around the world, and their perspectives provide valuable, rich insights into key challenges, opportunities and practices across many industries and geographies across the world. <<END>>
A key question to ask is … If Core Finance itself is not running effectively… how can Finance possibly be expected to meet the demands, and help the rest of the enterprise anticipate and respond with accuracy ,speed and agility to an uncertain, volatile and rapidly changing environment? How can finance help the enterprise shape it’s environment – a key factor in creating a competitive advantage? Finance needs to have strong capabilities in two areas in order to support a broader enterprise focused role for Finance. 1. Finance Efficiency – internal finance operations running well, with strong adherence to process and data standards, good governance, controls - optimized, not inhibited day by day by the tactical tasks of paying the bills, closing the books and producing financial results.. Instead, Finance should be running these functions optimally, and producing business insights on a daily basis through: operational reporting, such as DSO, aging reports, monitoring the supply chain to flag potential spend and fraud issues, monitoring T&E reimbursements for employee fraud 2. Business Insight – mature business analytical skills from the very basic, - such as operational planning and reporting capabilities needed to prepare, execute and adjust the financial performance goals of the company. To the more sophisticated - multi-dimensional profitability analysis, scenario planning, and even event, behavioral and risk based predictive analytics Finance is uniquely positioned as a hub, where the convergence of financial, operational and risk information come together. Finance is in the position, therefore, to be able to put all this together, analyze it and work with the business to interpret and take action on it. <<END>>
When you bring these two dimensions together, a 2x2 quadrant emerges, defining 4 finance profiles. The Value Integrator is high on both dimensions, top right of the quadrant – having strong business insight coupled with finance operations that are efficient, as described earlier –running well, optimized. The Scorekeeper , opposite the Value Integrator, is the least matures of the four profiles and is low on both dimensions – this profile is more the traditional controllership oriented finance organization, primarily focused on accounting operations, controls, closing the books, managing the audit and supporting regulatory and statutory compliance. There is either no mandate or a lack of capability for finance to do much more than that. The Disciplined operator is more like the IFO from the 2008 study – has built a strong foundation of finance controls, standard processes and data – however has yet to deploy more mature analytical capabilities and partner with the business. But for all intents and purposes, the Disciplined Operator is driving more out of finance with less. The Constrained Advisor is the opposite of the Disciplined Operator – having done more to deploy greater planning and analytical capabilities, these finance organizations have the best intentions in mind, but are constrained in terms of their execution capabilities. This is largely due to the fact that they still have issues with process and data standards and commonality, leading to fragmented data and having to do drive their analytics through brute force. As a consequence, they continue to be challenged by several things, including 1) Challenges around the accuracy of their analysis 2) They cannot produce these results timely/quickly, and so consequently they are “constrained” So how are our 1,900 participants distributed across these profiles? Approximately 23% are Value Integrators, 12% are constrained advisors – clearly the minority group. The remaining 65% are roughly split between Scorekeeper (33%) and Disciplined Operator (32%). We suspect the reason that there are so few Constrained advisors, relatively speaking, is that they have recognized the challenges and issues associated with trying to produce robust analysis in the midst of “Structural Complexity” – in other words without having first established a set of common process and data standards within which to operate. <<END>>
Specifically, they have done more to employ more sophisticated analytics, for example risk based performance reporting. And they have leveraged more external data and integrated it into their analytical frameworks, such as economic indicators, customer and competitive data and benchmarks. On the process front, they have done more to employ functional best practices, utilized tools to automate financial workflow, and have developed more comprehensive process measurement tools to monitor processes at a more detailed and cross-functional level. On the technology front, they have done more to rationalize and deploy both common reporting and planning platforms – and are making greater strides in deploying even more sophisticated and predictive analytical capabilities. Less compelling but still somewhat relevant on the people and organization front, among Value Integrators, Risk Management and Controls more frequently report directly into the CFO. So clearly, across the board, Value Integrators have historically gone through transformation efforts and continuous improvement to drive both finance efficiency and business insight – and more recently done more to build on top of that, across this range of additional enablers. These generally accepted to be the characteristics of a World Class Finance organization, which, since they are e also the characteristics of the Value Integrator, allow us to suggest the Value Integrator exemplifies many of the characteristics of World Class finance practices. <<END>>
Additionally there are non-financial performance benefits to being a Value Integrator. Looking at the CFO agenda once again, across all the agenda items, Value Integrators as a group expressed a much higher level of effectiveness against these agenda items than each of the other profiles. On average, across the entire agenda, Value Integrators are 60% more effective across the entire agenda, Constrained advisors 33% and Disciplined Operators almost 20% better, compared to Scorekeepers. There are several outliers where the Value Integrator has significant advantages that are consistent with what we have found Value Integrators do better or more of, than the rest. The biggest, of course, is the far greater effectiveness in information integration. But other areas of significant improvement include measuring business performance, executing continuous finance improvement, and risk management. Recall again from an earlier slide that the two areas that have increased in importance more than any other in the past five years (or 3 consecutive IBM CFO Studies) are Risk Management and Information Integration. So clearly, Value Integrators have been driving improvements in these areas, consistent with the increase in importance, trying to address the effectiveness or execution gap they had been experiencing. How did we arrive at this comparative analysis? We started by establishing the Scorekeeper as the baseline – their effectiveness on each agenda item was base-lined to a common factor. Against that baseline factor we calculated the relative greater effectiveness of each agenda item, profile by profile. So the comparisons are really against the scorekeeper as a baseline, but with an apples to apples comparison of each of the other profiles against the scorekeeper and each other. <<END>>
CIOs and CFOs – especially those from hi-growth organizations – share common priorities
CIOs CIOs are challenged to bring organization and meaning to the vast amounts of data across the organization Historical efforts to develop meaningful information systems include: Lack of clarity around data and analytical requirements – “who owns the data” Poorly defined business requirements Lack of clarity around data ownership Unclear business processes Application and data integration CFOs CFOs are challenged to bring fact-based business insight on financial performance Historical efforts to drive better insight have been hampered by Lack of clarity on the performance scorecard Absence of risk factors Poorly designed predictive models Structural complexity of data and processes In many industries providing risk based analytics is becoming essential CIOs and CFOs can collaborate to address their Analytics priorities by: Defining the company performance scorecard Adopting enterprise wide data standards Instituting a data governance process Developing and supporting “one version of the truth” Designing and creating a common data layer Capturing data at the source Applying systematic data cleansing Streamlining information delivery through portals
CIOs CIOs have traditionally focused on IT-related risks such as planning for disasters, ensuring business continuity and facilitating compliance. Risk is becoming more of a “Team Sport” across the enterprise requiring the involvement of the entire C-Suite Addressing risk factors in business performance for many industries requires consolidating vast amounts of data and conducting extensive analysis through sophisticated predictive models Computing resource requirements are vast CFOs CFOs risk concerns stem from financial, operational and control based events CFOs are concerned about all risk factors, since they ultimately can result in a financial consequence Financial and operational risk Business continuity Internal and external compliance requirements Adapting to changing business conditions Data access, security and privacy CIOs and CFOs can collaborate to address their Risk Management priorities by: Developing a strong analytical foundation Defining and using data that predicts potential consequences of various risks Improving performance reporting, incorporating these defined risk indicators Implementing industry specific risk monitoring application systems (e.g. AML, Fraud) Implementing Governance Risk and Compliance solutions to monitor business process changes Providing information access and integration through roles based portals
CIOs The best CIOs are Savvy Value Creators who seek to fully understand the priorities of their C-Suite colleagues 87 percent of CIOs in high-growth organizations expect to seek customers’ active input CIOs recognize the importance of having IT talent understand the business CIOs are using collaboration and partnering technologies to improve communication and teamwork internally and externally CFOs The best CFOs are those that can be the “fact based voice of reason” in their partnership with the business, driving informed business decisions by leveraging analytical tools and information integration 81% of CFOs cite developing people, talent and leadership as a top initiative to improve business partnering and collaboration Effective business partnering can only occur when the reputation has been earned, which depends upon consistently providing good advice backed by strong analysis CIOs and CFOs can collaborate on business collaboration of both a strategic and tactical nature by: Developing consistent policies Developing strong people talent and leadership Driving common processes Supporting automation and collaboration efficiency with enabling technologies Aligning performance and goals to drive appropriate behaviors
CIOs Successful CIOs are “Able Pragmatists” – leveraging information and technology to drive value and efficiencies Every process is increasingly technology based with information enabled from customer interaction to supply chain management CIOs can be instrumental in driving improvements across the organization leveraging Alternative delivery models Automated workflow tools CFOs Successful CFOs are Value Integrators – leveraging a foundation of process and data standards to drive “Financial Truth” Every process needs to become increasingly streamlined and integrated, enabled by reducing structural complexity in systems and processes, leveraging Automated workflow and controls technology Governance risk and compliance tools Integration data across related processes CIOs and CFOs can collaborate on business collaboration of both a strategic and tactical nature by: Standardizing processes by adopting alternative delivery models such as global shared services and outsourcing Increasing transparency and information visibility across many dimensions, constituents and partners More effective risk management based on better information and more robust analytics capabilities Adopting automated workflow tools Incorporating risk mitigation processes into business workflows, including triggers and alerts
