Samuel Dergel, Executive Search Consultant and author of “Guide To CFO Success” posted a story proposing a new name added to the executive table – Chief Analytics Officer or CAO and stating that since Finance had not managed Big Data and Advanced Analytics well it should be taken off the CFOs hands. However, later, we noticed positions like “Analytics Analyst” popping up and it did get us thinking. Where has Finance failed when it comes to analytics and Big Data and do we need a CAO?
First, we don’t think Finance has failed, however, Finance has not succeeded either. The function is developing rapidly as with everything else in society. Transactional tasks are being offshored/outsourced and large-scale ERP systems are eliminating, automating and digitizing tasks at a pace never seen before. On the other hand, the amounts of data available to companies have increased exponentially and still do, yet, few companies know what to do with all this data. Typically, it falls between chairs of IT and Finance but none of those functions have managed well to make the data work for the business. IT lacks business savviness whereas Finance has fought to gain this yet failed to get people that are equally strong at analyzing data. In general, both disciplines (business finance and advanced analytics) are two very different things where one requires generalists and the other specialists.
Therefore, it makes very good sense that next to all the business finance / partnering teams that have popped up in the finance department over the past 10 years that we start to see advanced analytics sections pop up too to tackle the monster of big data by analyzing the way companies do their analytics i.e. deciding which models to use instead of letting it be up to individual finance professionals. It is quite logical that companies can’t get value out of Big Data until they have structured their analysis by hiring specialists who can handle the insane amounts of data available.
Where it gets critical is linking the specialist and generalist functions of Finance as the finance business partners need to know enough about the analysis models used in the company to understand the specialist’s language while at the same time knowing enough about the business to be able to put the analysis to work for the business.
Have your company figured out a way to do this or are you still struggling with data or specialists who can’t communicate with the business? If so, you might just need a Chief Analytics Officer!