Why the CFO should own OIS

As described in How OIS  truly Maximizes Profit,  OIS integrates, for the very first time, two advanced analytical techniques: predictive analytics and MILP.  The immediate question which then presents itself is: which C-level executive should have responsibility for these advanced analytics? There is a growing consensus that it should be the CFO. This view was first brought to the author’s attention by an article in the October 29, 2014 issue of CFO Magazine. It was titled “Why CFOs Should ‘own’ Analytics” and was written by Frank Friedman, CEO and former CFO of Deloitte LLP.

Friedman cites three reasons why advanced analytics should be under the CFO’s leadership:

“First, CFOs ‘own’ most of the unprecedented quantities of data that companies are collecting from their own operations, supply chains, production processes and customer interactions. Many CFOs are already using analytics to better understand where the business is strong and where it needs improvement, and how to allocate limited resources more effectively. Analytics empowers CFOs to exercise more centralized control of operational business decision-making. As profit can fall between the operational cracks, analytics can be a game changer by leading to improved operational discipline.

Second, many CFOs are already using analytics to address their organization’s strategic issues. By owning analytics, they can continue to expand their strategic leadership role in growing the top line, strengthen their ties throughout the business and expand their influence outside the finance function.

Third, CFOs’ position as the steward of value and impartial guardian of truth across the organization gives them the credibility and trust that is needed when analytics produces insights that debunk some of the myths or accepted wisdom that can reside within the business, or about constraints on business performance. When people are provided observations that do not align with their thinking, there is a tendency to say, ‘That can’t be right,’ and it can be challenging to convince them that the results and the data they’re based on are accurate. If they don’t trust the messenger, they are unlikely to trust the message.”

For complete article, go to (http://ww2.cfo.com/analytics/2014/10/cfos-analytics/).While this author finds doesn’t agree with the CFO owning analytics in toto, he finds the three reasons cited above compelling for analytics which are both advanced and cross-functional.

And, more recently, CFO.com published a Special Report titled “The Promise of Predictive Analytics” with four excellent articles focused on the CFO and predictive analytics.

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