In survey after survey, CFOs rank data and analytics as their highest priority for capital expenditures. This has been true for years, both before and during the current recession and usually regardless of industry or size of organization.  So why are many data and analytics projects not funded?

I have been extensively involved in the data and analytics space for 18 years.  Within this broad field, I include many categories of applications

  • Data warehousing
  • Business intelligence
  • Data mining
  • Predictive analytics
  • Cubes
  • Dashboards and balanced scorecards
  • Performance management and key performance indicators (KPIs), to name just a few

The reason I generically put all of these together is because most of these names, terms, and concepts have been derived by IT software vendors and professionals in an attempt to carve out a niche for themselves in a crowded and ever-growing market.  (A few years ago Gartner Group counted more than 150 BI software vendors.)  This creates a lot of confusion and many times creates a situation where a focus on the business is lost among the wars on terminology, philosophy, and technology.  Invariably, the result is a focus on cost rather than value, growth, profitability, and productivity.

Also lost in this confusion and chaos is the guidance and information the CFO needs to both fund and sponsor a data and analytics effort.  Executive and financial sponsors need to answer two big questions:

  1. How is this going to benefit the organization and our customers?
  2. What is this going to take in terms of the 3 T’s: time, talent, and treasure?

The first two steps of The intelligentBusiness Program™ are two relatively simple and quick steps you can take to help your finance and accounting executive:

The Business Focus™ provides clarity and alignment by focusing on how your organization“creates business value” and how this project will support and enhance that value creation process.  Focus on creating a decision-making center that manages data and analytics, allowing decision-making to be easier for the organization.  Some ways to focus on business value include:

  • Quantify expected value (i.e. return on investment)
  • Identify the business reasons for doing the project (i.e. critical success factors)
  • Identify those factors that might jeopardize project success and action plans to mitigate those factors (i.e. risk assessment)

The Strategic Navigator™ determines how you will accomplish your Business Focus™ using a “plan strategically, build incrementally” approach to chart and navigate a course that delivers real business results.  A few key concepts behind a good data and analytics project plan include:

  • Starting small (but not too small) to minimize the initial investment and risks
  • Targeting a few quick wins to realize a return on investment, prove out any assumptions made earlier, and shorten the “time to value”
  • Giving yourself an opportunity to get feedback from your executive sponsors, business users, and project team so you can course correct, if necessary, before diving into the deep end

CFOs want to move forward and pursue growth, but in the midst of uncertain economic, monetary, and regulatory conditions, they are proceeding cautiously.  If you approach your data and analytics initiative correctly from the beginning, you can arm them with the information and the confidence to both fund and sponsor your initiative.

Question: What are data and analytics on your CFO’s priority list?  Leave a comment below.