by Peter Walker for Director of Finance Online, July 11th, 2011.
Why predictive analytical information has to be automated and embedded into the current BI system.
From bean counter to business leader: Can a performance management framework with embedded predictive analytics really help change the role of the CFO?
The role of the CFO has undergone significant and dramatic changes since the early 1980s, with some of the biggest taking place over the last decade or so. In the run-up to Y2K, companies invested heavily in preparing their IT systems, with many opting for enterprise resource planning (ERP) applications to ensure a smooth date-change transition.
Today, the role of CFO comes with even more pressure, with increasing demand to identify cost savings and uncertainty around every corner. In the most recent business cycle, the emergence of regulations such as Sarbanes-Oxley, Basel III and their associated compliance costs has kept cost containment on the front burner, while putting pressure on the CFO to implement more effective internal controls and corporate governance. Given these issues, it is not surprising that the CFO’s role is often far from easy or predictable.
However, this is not to say that difficult situations don’t have their advantages. In many cases, they offer a level of freedom to act that is not present during the boom times. When the old ways have been proven inadequate, it is my view that today’s CFO has more latitude to make the changes needed to create a new performance management culture that explores patterns found in real-time data to identify risks and opportunities. It is clear that post the financial crisis, many CFOs believe that having real-time access to estimates, projections and pattern recognition will allow them to act prior to the occurrence of the events predicted. (continue reading… )