In 2005, CFO Research Services, in collaboration with Deloitte Consulting LLP, conducted a survey of senior finance and IT executives in North America, Europe and China.1 The 385 respondents to the survey painted a startling picture of the state of information quality (IQ) at the world's leading companies. The results of the survey spoke volumes about where those companies are in their journey toward IQ - and about how far they still have to go.
However, there were some bright spots in the survey. Approximately 40 percent of respondents indicated that they had access to financial and operational information that accurately reflected business performance. Another 25 percent said they had access to timely, accurate financial and operational information for decision-making. While these numbers are not optimal, they are encouraging. IQ is not an impossible goal.
What are these achievers, as opposed to the aspirants, doing right? Several things, actually. First, they're investing precious IT dollars to help remove complexity in their information architectures and processes. They're also looking outside the IT function to help solve the problem in two ways: by involving the C-suite in the IQ improvement effort and by encouraging a collaborative relationship between finance and IT.
Complexity in the IT landscape was a significant issue for most survey respondents. Nearly 80 percent of respondents reported receiving multiple versions of the truth from their information systems, and another 78 percent said they felt buried by data but did not have enough useful information for decision-making. However bleak this might sound, the key here is that 22 percent did report meeting the goal of receiving consistent answers to their questions and obtaining useful information for decision-making.
One way they have accomplished that goal is by removing the complexity from their IT architecture. There are several ways to do this. Of course, if you read my columns regularly, you know I'm a hard-core believer in investing in master data management initiatives to provide consistent, timely, useful information across the enterprise.
My pet project aside, there are other ways to ameliorate IT complexity. In the survey, more than 80 percent of respondents reported that they have invested or are anticipating investing in initiatives to achieve tighter integration of applications and IT infrastructure. Almost 75 percent of respondents said that they were also going to invest in projects to tackle large-scale business process simplification. The point to this is not to recommend a specific project. It is to let you know that there are many ways to accomplish your IQ goals. It can be done.
Another way many respondents are meeting their IQ goals is to encourage traditional IT outsiders, such as the finance function, to take greater responsibility for IQ and to take an active role in developing and implementing data governance structures. More than 75 percent of survey respondents agreed that finance is increasingly responsible for IQ and, therefore, has a critical role to play in IQ improvement.
When you look at the findings, they make sense. In recent years, the finance function has evolved into the aggregator and interpreter of organizational information - both financial and operational. Who better, then, to play a large part in providing IQ and developing an enterprise data governance structure?
The CFOs at many of the respondent companies are working more closely with IT to understand and remove barriers to IQ by assigning ownership and accountability throughout their respective business functions. They're also working to develop data governance policies and procedures based on shared strategic objectives, which brings me to my next point: the trend of increased collaboration between IT and the company.
Because of the CFOs' increasing responsibility for providing IQ, many companies that have achieved IQ improvements have also reported increased collaboration between the company and IT - especially between the CFO and CIO. More than 60 percent of survey respondents reported that their CFO had input into developing IT strategy, and another 60 percent said that their CFO and CIO had formed a close, collaborative relationship vis-á-vis IQ improvement initiatives.
It simply makes sense that those who collect and use information would also help in the process of making that information relevant, accurate and usable for decision-making. More and more IQ achievers are starting to foster this collaborative relationship. The result is: IT has the opportunity to better understand business processes and people, and decision-makers can develop a deeper understanding of IT functions.
There is no silver bullet for improving IQ. If I had one, I could become very wealthy very quickly and retire tomorrow. Instead, IQ improvement takes lots of hard work and more than a few changes to the status quo. However, if you start on the journey to IQ improvement by following the path of those in the survey who have reported achieving desired results, you might have a leg up on your competitors who are still standing around, wondering how to get started!
- IQ Matters: Senior Finance and IT Executives Seek to Boost Information Quality. A Survey by CFO Research Services. Boston: CFO Publishing Corp., November 2005.
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