CFOs need to make sure that their organizations are ready to respond to these requests. They need to develop plans for hiring and training staffers. They need to be ready to advise other departments about who to hire to make use of this emerging technology.
Most of all, the CFO has to help create a culture in which managers habitually use predictive analytics to make decisions rather than relying on experience and gut instinct alone.
Unfortunately, the skills needed to use Big Data are scarce. In the current business world, there aren’t very many data scientists who both know how to use technologies like Hadoop and have the business savvy to analyze data and ask the right questions that generate clear choices.
Analysts and consultants have trumpeted the shortage of data scientists. McKinsey & Co. estimates that by 2018 there will be up to 190,000 unfilled data-scientist jobs in theU.S. and an unfilled need for 1.5 million managers with analytical skills they can apply to their line jobs.
That skills shortage emerges in many pockets of business. A recent survey by Booz Allen Hamilton found only 18% of managers of federal departments believe their agencies have the capability to analyze Big Data. Wanted Analytics, which tracks the HR and recruiting industries, says demand for candidates with analytical skills is up 10% this year and those jobs are “moderately difficult” to fill compared to other HR jobs.
Finance departments are not immune to the need for Big Data skills. According to a survey by CEB Financial Planning and Analysis Leadership Council, 71% of FP&A teams say that they fail to consistently deliver meaningful insights to the business.
The problem is that the amount of available data to analyze has exploded in the past five years. Until recently, there wasn’t a need for Big Data specialists, because there simply wasn’t the ability to organize data in a way that enabled effective decision making. Segmenting audiences and sampling opinions was the best even rigorous theorists could do.
But in recent years online merchants like Netflix and Amazon demonstrated the value of using copious transaction data to treat every customer differently. Marketers began to understand they could manage reputational risk by monitoring Twitter, Yelp and even YouTube. The access to new types of external data suddenly created a need.
University graduate programs in operations research with heavy statistical analytics courses are an ideal source for the needed expertise. But they are far too small to fill the growing gap. Most companies are going to have to make a commitment to training their own talent.
Virtually all business schools require students to take at least one business statistics class and many are adding more courses in analytics, but what better place to start training than within finance organizations? Numerically-literate employees are the best candidates for training. Barry Melancon, president of the American Institute of Certified Public Accountants, recently blogged that “CPAs are perfectly suited to take a leadership role in deciphering and using Big Data to achieve strategic business goals.” Given the large numeric datasets that financial professionals encounter every day, a mastery of analytics is a necessity, not an option.
My company, IBM, recognized the coming shortage several years ago, and took a broader view in training high-potential hires with Big Data skills. In 2009, we began the process of recruiting 5,000 liberal arts majors to become data scientists in our consulting practice through a rigorous two-year program. It included extensive time working with IBM mentors and placement on teams working on stimulating, cross-industry projects. Within just a few months of training, a dance major ended up helping an art museum by analyzing attendance statistics and designing shows that would attract new visitors.
IBM is also working with some 500 universities around the world to help develop curricula that will produce qualified data scientists. Programs include undergraduate classes, graduate programs and even two-week intensive courses for MBAs.
Addressing the skills shortage isn’t an easy task, and won’t happen overnight. But CFOs need to move quickly to bring their existing staffers into the realities of operating in a Big Data world. To navigate in today’s rapidly changing environment, finance professionals need to analyze different sources and connect the dots to truly understand the big picture. Big Data is the foundation for 21st century financial skills and finance professionals should lead the charge in their organizations to turn large amounts of data into better business insight.