Transforming the CFO Role with Bytes

Today’s CFOs face their own unique set of challenges.

The first of these is performance management. The challenge is not new, but data is offering a fresh new angle and trial.

The real issue is how CFOs can manage, leverage and monetize data in a business environment where it is becoming increasingly valuable. The end result is the ability to ascribe value to a firm's data that appears on a balance sheet and is accounted for just as any other asset.

Data is at the core of the digital economy in the same way oil powered the 20th century. It is one of the reasons why the phrase “data is the new oil” is now frequently used.

Like oil reserves, the large percentage of data that exists today remains untapped and unused. Data is waiting to be mined before it can be applied and fulfill its potential. But unlike oil, data does not as yet have a monetary value. 

Accounting standards, which changed decades ago to allow the monetization of brand value on balance sheets, do not yet allow for the monetization of data. For many firms, data is unfortunately still a cost center.

The momentum for change, however, is building as more organizations not only find value in their data but share and trade it with others.

Just as it took time for the oil economy to reach its zenith, we are now only at the beginning of new possibilities created by the new era of Big Data Analytics.

In Australia, major corporates such as Qantas, Westpac and NAB invested in a startup called Data Republic, which functions as an “Airbnb" for data in what is called a "governed platform."

The idea is that users can access the data of contributing corporates and aggregate them to create new insights and products. Corporates retain ownership of the data they provide, while users are able to use whatever analytical tools they choose as long as the data remains on the platform, where it is governed according to regulations.

Data Republic is an emerging example of how firms can monetize their data, but it won’t be the only model.

Australian banks are already looking at how they can monetize their data.

Westpac has a stake in another startup called Zetaris, which is a data analytics offering where users can analyze a diverse range of data sets in a cloud environment, without having to create their own data lake or warehouse.

There are significant implications for CFOs in these developments. Once data goes from being a liability to an asset, and one to which value can be ascribed, it becomes part of the performance management remit for the CFO.

The monetization of data is a significant focus for leading-edge companies in 2018. We can be sure that the market will soon be seeing useful applications and business cases that achieve this goal.

As that happens, the CFO won’t just be strategizing around old-fashioned dollars and cents, but around data as well.