Big data and its permanent companion, analytics, is creating strange bedfellows. Finance and marketing heads, for example, are spending more and quality time together as they work out how they can mutually benefit from the possibilities of big data, as well as avoid the pitfalls.
Like most relationships, this takes compromise – and that means on both sides. Yet, if both are willing to collaborate fully, examining in tandem what’s creating the best shareholder returns, then the benefits are clear. They will have better information and insight that will not only help each department individually, but more importantly help the organization as a whole.
To make this work, the finance directors or chief finance officers (CFOs) may need to shift their perspective of marketing’s role in the company from being a cost center to see it for the revenue-generating powerhouse it can be. With better analytics, marketing should be able have greater opportunity to provide proof of the hard currency of return on investment (ROI) – music to the ears of any CFO or chief executive – rather than talk in generalities.
It’s also important that CFOs see their role as an advisor to marketing rather than the Grand Inquisitor of the Spanish Inquisition, asking probing questions about spending. In the spirit of entente cordiale, this must be a mutual discussion about what spending should be made and what circumstances would prompt a greater spend in investment, rather than simply announcing that cuts must be made.
In the same vein, CFOs should approach any conversation about what needs to be done using ‘we’ rather than ‘you’: ‘how do you think we should tackle spending’, rather than ‘you need to cut 20% from your spending’. This is partnership, everyone is on the same side.
This relationship building needs to go deeper than C-level executives; it demands a culture change across the team. A great way of doing this is to create cross-functional teams: marketing can learn more about financial drivers and finance can learn more about the kind of things that effect customer value. Together they can both work on creating marketing performance metrics that are equally understood by both disciplines.
And in the short term at least, the CFO must try and get to grips with the lack of certainty in marketing. Given this closer relationship, the language and cultural barriers will start to break down and common objectives will emerge that bridge the ‘grey’ areas of customer satisfaction and the more finite metrics that financial directors are used to dealing with.
Big data and analytics, used properly, create a direct line to profits and turnover. But you’re going to get there quicker, with greater gains if there’s collaboration between departments.
But don’t think this is a monogamous relationship. The CFO also needs to cozy up to the chief information officer (CIO). Yet, again, the CIO approaches big data from a very different standpoint that needs the application of some careful communication skills.
This rift was highlighted by a CSC-commissioned survey by Vanson Bourne a year ago, which interviewed both CIOs and CFOs on their big data views. And it seems CIOs had a rather dim view on the CFO’s knowledge. A worrying 23% thought their CFOs didn’t even know what big data was. Only 3% of CFOs however said they didn’t know what it was.
This was by no means the end of the slings and arrows lobbed in the CFO’s direction. The CIOs also thought that CFOs didn’t put a monetary value on data, while the CFO responses showed that more than half did.
Even more tellingly, the results revealed that CFOs had a far more positive view of IT’s contribution to business growth than IT did themselves.
The survey suggests that CIO’s opinion may be influenced by the fact that they are always hearing that what they provide is delivered too late or not to what users wanted.
Given the general tenor of the results, it was hardly surprising that CFOs referred to the relationship with their IT counterpart as “good but cold”. There was certainly respect, but no warmth.
Where the relationship does move beyond mutual respect to something approaching warmth is their shared view that big data presents a huge opportunity. After all, if Gartner’s prediction that by 2020 every company will be a technology company, then understanding and working closely with IT makes good business sense.
Analytics, used to its full potential, is something that combines business and department-specific data. Together, their benefits are more than can be achieved by using siloed information alone. If the C-suite – finance, marketing, IT and HR too – can work together rather than protect their fiefdoms, they will achieve far more than anything they can achieve individually.