Emerging Big Data Opportunities For CFOs

Big data is one of the most influential technology trends for the accounting profession, according to a recent report from IMA® and ACCA (Association of Chartered Certified Accountants). To explore what this trend specifically means for CFOs, check what the assistant controller of IBM said about emerging types of data from channels such as social media and how it can be used to inform strategy.

How do CFOs harness big data differently from other C-suite executives such as the CMO?

For CFOs, big data is an opportunity to glean deeper insights into the internal and external forces that influence their companies’ performance. The integration of big data brings new inputs and variables that help anticipate the future, enabling rolling views of leading indicators versus more traditional retrospective views. More frequent inputs allow the enterprise to respond more quickly to change.
By capitalizing on big data using business analytics tools, the role of the CFO is moving beyond optimizing the finance function to transforming the enterprise.
For other members of the C-suite, for example, the Chief Marketing Officer, big data provides insights on customer behavior, delivering information about customer sentiment and general perceptions of the company and its products to help shape future strategy. While CMOs are using big data and analytics to better understand the individual customer, CFOs are utilizing data to better understand the environment.

What new types of data have emerged that CFOs should pay attention to?

CFOs are used to dealing with highly structured and verifiable data – big data isn’t like that and it requires a change in mindset for CFOs to feel comfortable making use of it themselves.
Many CFOs are driving business agility by analyzing performance metrics such as resource productivity and inventory turnover. They are using this data to better understand their businesses and re-engineer and integrate business processes as part of a broader enterprise transformation.
From a CFO perspective, big data isn’t just about new types of data; it’s also about harnessing the availability of existing data. Business analytics tools enhance access while removing manual activity and enabling the processing of large volumes of data to make new connections and accelerate decision making.

What are some examples of CFOs incorporating data from social media sites and online forums as part of their integrated financial reporting responsibilities?

CFOs can make use of data from social media sites and online forums, and we see this in areas such as regulatory compliance, supply chain and labor climate. They monitor formal and informal media to predict sales trends and understand investor sentiment.
CFOs are also starting to generate their own big data by instrumenting their businesses to collect and incorporate large volumes of performance data supporting their new challenges of driving strategy and growth.

What typical roadblocks do CFOs face in using big data to drive strategy?

Many of the roadblocks that CFOs face are similar to those experienced by other members of the C-suite – the availability and usability of the data. However, tools are becoming available which make it easier to access data from less structured sources. CFOs have the opportunity to use this data to support fact-based decisions, developing their role as trusted business advisors.
A different challenge arises where big data cuts across traditional silos, encouraging enterprises to operate in a more integrated fashion. This changes the dynamics of the C-suite, with traditional roles becoming less clear-cut.

How will the way CFOs use big data change in the next five years?

Big data and business analytics raises the expectations of finance; taking advantage of this will call on different skills and finance departments should be focusing on building those skills.
CFOs are asked to analyze different options and strategies under consideration by the business; their finance teams must be able to use analytics to predict business outcomes and influence business leaders to deliver optimum results. CFOs will also become more effective advocates for change by building and communicating business cases based on big data findings.

Drive Customer Experience with Social CRM

Social media and the Web have given rise to a new form of empowered consumers who can research and voice their options, solve problems and have a powerful sphere of influence well beyond their backyard fences. Social media has added yet another digital channel, similar to the email channel in the early-to-mid 90s, that needs to be included in every comprehensive CRM strategy.

It’s widely recognized that the amount of data, both structured and unstructured, has increased at a previously inconceivable rate since the advent of social media. What should you do about all this data and about the burgeoning number of social media channels? Just because social activity is taking place doesn’t mean you should get involved in all of it.

When you consider that the top 10 social media websites experienced 27 percent more visits between June 2012 and May 2013—specifically, visits increased from 2.38 billion to nearly 3 billion —the prospect of managing all your customer interactions can seem intimidating.  But it doesn’t need to be that way. By creating a focused strategy, and using CRM technology to deliver on that strategy, you can get a greater return on your investment than ever before.

Social Media is Here to Stay

Businesses like yours must recognize that social media is not a trend — it will keep growing and evolving, and it’s important that your strategy grows and evolves with it. Whatever your industry, social media can and will impact your business, whether you choose to engage in its usage or not.

Now are the days of the social consumer — consumers who might take a question to Twitter, a customer service query to a user forum, a compliment to Facebook, a photo to Instagram, a thumbs- up to a posting on Reddit or a complaint to Yelp. And, because more and more consumers are communicating with companies and each other this way, a complaint can go viral on a variety of social channels before you know it. Should you react to a complaint or ignore it? Could you have anticipated it? Can you turn a negative into a positive, and gain a louder, more positive voice? Have you thought about taking advantage of positive posts to promote your brand or company?

Change the Way You Work

You need to take advantage of social media as both a channel and a data source by integrating social, mobile, digital media and data into your direct marketing, customer engagement and overall CRM strategy. Consumers value objectivity, referrals and references are more critical than ever, and a social media relationship with one person is now a relationship with that person’s entire social network.

Take advantage of the peer influence-based consumer decision-making process by proactively executing social media-focused campaigns, segmenting campaigns by social media channel, and enriching customer records and profiles with social media attributes. By doing this, you provide your marketing department with a new way of thinking as it relates to creating customer segments and campaigns.

Consumers’ perception of your company, products and services can change rapidly as a result of the speed of social media. You need to respond quickly and effectively when potential issues or problems arise, and when consumers have concerns or questions. That means you need to know how to quickly respond with social media replies, next-best action and next-best experience recommendations across any delivery channel (including traditional ones such as direct mail and email). To drive consumer interest and build loyalty, you should recommend social media offers, customer membership promotions, and more. Additionally, by creating a bridge between Facebook and your company’s website via new social graphs, you can allow consumers to express themselves in new and creative ways.

Make it Relevant

Let’s take a look at some ways your company can use CRM and real-time marketing to leverage social media as a communications channel—and in the process bring effectiveness and finesse to the social media presence.

1. Take advantage of customer deals. You can manage your inventory by using social media and a CRM solution to educate customers about upcoming or last-minute discounts and deals. If you apply CRM principles to your strategy of educating customers about last-minute deals and discounts, you won’t send them every deal you have, because every deal won’t be relevant to every customer. You should send your deals with view and rest periods across media (for example, email, Twitter, and conventional mail), so you don’t become “white noise.” Sending irrelevant offers too frequently is deadly, regardless of the delivery medium. An integrated outbound and inbound marketing platform can make fast work of these needs and effectively coordinate the deals you offer.

2. Make the most of real-time messages. Remember, timing is one of the critical components of the CRM adage of sending the right message to the right customer at the right time via the right medium. You could send your messages as private tweets or as private Facebook posts via the use of triggered events depending on the data your CRM system has about a customer’s social media and digital marketing preferences, privacy settings and online behavior.

Maximize Your Social Media Investment

To maximize what could turn into a significant time investment in social media, you should:

1. Take inventory. Assess what you are doing today in social media. Perhaps you are sniffing for positive or negative mentions of your product. As is growing more common, you may be managing a social servicing department. Or you might have sidebar advertisements on Facebook and/or YouTube pages. Whatever your existing tactics may be, begin analyzing their effectiveness today.

2. Strategize. After you research the topic of social media, brainstorm and strategize about which new social media and digital marketing tactics you’d like to implement. Begin to include social media as  delivery points for your marketing messages and to overlay a CRM-centric approach to your messaging via social media.

3. Set a goal. Define a purpose for your social CRM project based on what it can do to assist and engage customers and on how it can improve a key business metric such as cost to serve, referrals or conversions.

4. Be careful not to overdo it. Layer your new social media strategies and tactics onto your existing cross-channel marketing roadmap or calendar. Treat them as campaigns and include cross-media rules so you don’t oversaturate your customers with “touches.” Remember that social media is an effective medium for customers to share their issues with the world. Use your touches as you would a spice — that is, easy does it.

With the right strategy and technology in place to support it, social media can be used to better understand, serve and communicate with your customers and prospects. By taking advantage of social profile data, you enhance digital marketing capabilities focused on contextual, transactional and addressable branding initiatives. But in order to unleash these benefits, you need to make social media part of your overall customer experience strategies instead of keeping it in an organizational silo.

Predictive Analytics Most Used To Gain Customer Insight

Using analytics to better understand customer satisfaction, profitability, retention and churn while increasing cross-sell and up-sell are the most dominant uses of cloud-based analytics today, following the results of a recent study.

Key takeaways of the study results include the following:

• Customer Analytics (72%), followed by supply chain, business optimization, marketing optimization (57%), risk and fraud (52%), and marketing (58%) are the areas in which respondents reported the strongest interest.
• When the customer analytics responses were analyzed in greater depth they showed most interest in customer satisfaction (50%) followed by customer profitability (34%), customer retention/churn (32%), customer management(30%), and cross-sell/up-sell (26%).
• Adoption was increasingly widespread and growing, with over 90% of respondents reporting that they expected to deploy one or more type of predictive analytics in the cloud solution.

• Industries with the most impact from predictive analytics include retail (13% more than average), Financial Services (12%) and hardware/software (4%). Lagging industries include health care delivery (-9%), insurance -11%) and (surprisingly) telecommunications (-33%).  The following graphic illustrates the relative impact of cloud-based predictive analytics applications by industry.

Adoption of Cloud-based Predictive Analytics by Industry

 

• The most widespread analytics scenarios include prepackaged solutions (52%), cloud-based analytics modeling (47%) and cloud-based analytic embedding of applications (46%).  Comparing the 2011 and 2013 surveys showed significant gains in all three categories, with the greatest being in the area of cloud-based analytic modeling.  This category increased from 51% in 2011 to 75% in 2013, making it the most likely analytics application respondents are going to implement this year.

Comparison of Analytics Applications Most Likely To Deploy, 2011 versus 2013

• 63% of respondents report that when predictive analytics are tightly integrated into operations using Decision Management, enterprises have the intelligence they need to transform their businesses.

Impact of Predictive Analytics Integration Across The Enterprise

 

• Data security and privacy (61%) followed by regulatory compliance (50%) are the two most significant concerns respondent companies have regarding predictive analytics adoption in their companies.  Compliance has increased as a concern significantly since 2011, probably as more financial services firms are adopting cloud computing for mainstream business strategies.

Concerns of Enterprises Who Are Using Cloud-based Predictive Analytics Today

 

• Internal cloud deployments (41%) are the most common approach to implementing central cloud platforms, followed by managed vendor clouds (23% and hybrid clouds (23%). Private and managed clouds continue to grow as preferred platforms for cloud-based analytics, as respondents seek greater security and stability of their applications.  The continued adoption of private and managed clouds are a direct result of respondents’ concerns regarding data security, stability, reliability and redundancy.

Approach To Cloud Deployment

• The study concludes that structured data is the most prevalent type of data, followed by third party data and unstructured data.
• While there was no widespread impact on results from Big Data, predictive analytics cloud deployments that have a Big Data component are more likely to contribute to a transformative impact on their organizations’ performance.  Similarly those with more experience deploying predictive analytics in the cloud were more likely to use Big Data.
• In those predictive analytics cloud deployments already operating or having an impact, social media data from the cloud, voice or other audio data, and image or video data were all much more broadly used as the following graphic illustrates.

Which Data Types Deliver The Most Positive Impact In A Big Data Context