CFOs are getting more involved in digital business initiatives, according to an August report from McKinsey. In an April survey of 850 C-suite executives, seventy percent of finance chief respondents said they support digital initiatives, compared to 64 percent in 2012. Of that group, 37 percent said they are directly engaged in the initiatives or sponsor them, compared to 32 percent in 2012.
McKinsey defined digital initiatives as those that include big data and analytics; digital engagement of customers, employees or external partners; automation; and digital innovation.
That support from CFOs could be crucial. When asked what causes digital initiatives to fail, most respondents cited a lack of senior management interest, internal leadership or program management, rather than technical barriers.
The survey also found that more companies are using big data or analytics tools to improve budgeting, forecasting and planning. Forty-six percent of respondents said so this year, compared to only 34 percent in 2012.
“The analytic systems are coming to a level of maturity where these sorts of uses are becoming more commonplace within companies,” says Johnson Sikes, a consultant at McKinsey and co-author of the report. “Companies are looking for ways to improve these processes and the tools and the data are becoming more available. So you’re just seeing this continue to ratchet up.”
Overall, respondents largely said their companies are using big data to grow revenue, rather than cut costs. “They’re looking to analytics to figure out ‘how to we target new customers,’ ‘how do we actually improve the amount that we sell to existing customers,’ and ‘how do we use it to better manage our supply chain and improve our efficiency that way’?” says Sikes.
One finding that surprised the authors: thirty percent of respondents said they had a chief digital officer. “That position is beginning to become popular. But, at least personally, I didn’t expect it to be that high,” Sikes says. “It’s a relatively recent position but one that seems to be growing and getting traction in executive teams.”
When it comes to actively sponsoring digital programs, chief executive officers still hold the reins. Thirty-one percent said they sponsored digital initiatives, compared to 23 percent last year. Sikes says chief executives may be getting involved because they have the widest purview at the company. “Many of these programs hit different aspects of marketing, sales and operations,” Sikes says. “So the CEO may be the only leader really capable of driving this integrated change across the enterprise at the end of the day.”