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Do You Think Like a Billion Dollar CFO?

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We recently released our CFO Indicator Q3 2015 report, which reviewed 435 global CFOs’ priorities and predictions on data, KPIs, economic issues, and factors for planning in 2016.

As we took a deeper look at the data, we separated out the responses from CFOs at $1B+ companies to answer a few questions:

  • How are these members of the “billion dollar CFO club” looking at data?
  • What economic challenges are top of mind?
  • And, are they more or less concerned about driving toward a single source of truth?

Given that CFOs of larger companies are typically faced with multiple locations, subsidiaries, currency challenges, etc., it was no surprise that they were more concerned with political and economic issues when planning compared to the broader set of respondents. The billion dollar club’s top concern for 2016 planning? Market volatility in China—a concern that didn’t even rank in the top three for the broader CFO group. Also in the top three planning concerns for billion dollar CFOs was the outcome of U.S. presidential elections, signaling the broad political impacts these finance leaders must consider. (The U.S. elections did not even make the top five list for the broader set of CFO respondents.)

Given the international exposure for billion dollar club CFOs, it also wasn’t a surprise that they listed currency fluctuation as a top three concern when asked about external factors posing the greatest financial risks to their companies. The broader group of CFOs ranked currency fluctuation as No. 6, but all CFOs listed competition and economic uncertainty as their top two concerns, respectively.

Single source desired no matter what size

What was surprising is that the number of CFOs at $1B+ companies that have achieved a single source of truth was nearly identical to their sub-billion dollar counterparts. While billion dollar club CFOs juggle more data from more sources (40% manage data from five to 10 systems, compared to only 22% of the broader CFO group) a full 37% have achieved a single source of truth—and another 43% said it is in process. This tracks nearly identically to the broader group (see graphic below), underscoring the importance for CFOs at all organizations to achieve a holistic view of the business in order to better manage their corporate performance.

blog indicator pie chart

However there is a difference in how they are getting there. Only 33% of billion dollar club CFOs are still manually aggregating data, compared to a sizable 47% of the broader group.

Scaling the mountain of data

Given the CFOs’ views on the ever-increasing amount of data, manual aggregation is clearly not sustainable for companies of any size. While the analysis showed a variance on how fast CFOs believe data will increase, they do agree it is growing. Not surprisingly, billion dollar club CFOs are more bullish on the growth of big data, with 47% predicting data will increase by more than 50% in the next five years, compared to only one-third of CFOs from the broader group who predict this level of increase.

With a bullish view on data, these billion dollar CFOs are also betting on predictive analytics as they move to the next level of finance transformation. A whopping 70% believe predictive insights are valuable to their business, while 59% of the broader group agree, signaling the role that big data and analytics are playing/expected to play in companies of all sizes.

Whether at a $1M or a $1B+ company—or anything in between—CFOs continue to face the challenges of aggregating operational and finance data in order to inform their businesses. Driving toward this single source of truth is a unifying theme and one that we believe will continue as CFOs at companies of all sizes continue transforming their finance organizations.

Read the full CFO Indicator Q3 2015 report for additional perspective on how finance leaders are dealing with the coming data deluge, and compare your views to global CFOs.

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