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ADVISORY

Big Data &


Analytics:
turning conceptual thinking
into powerful results

www.kpmg.com/nl
Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 2

A key future challenge for CFOs


You cannot have missed the buzz structured and unstructured - is can actually look at the details of Key findings in our research are:
around Big Data & Analytics these combined. This combination leads social interaction, instead of being
days. Expectations about the to fresh insights, enables the limited to averages like market • CFOs have the ambition of playing a central role in setting up and
potential of Big Data & Analytics development of innovative products, indicators or poll results. The effect of maintaining Big Data & Analytics’ strategies. In their vision, the finance
have skyrocketed following the hype creates new business models or may this change is profound: we may be function – not the IT department – should be taking the lead in this field;
created by the tech industry. When lead to substantially higher efficiency able to predict and control market • CFOs believe in Big Data & Analytics’ potential to gain competitive
one looks beyond the hype, there in processes. movements, political revolutions and advantage – both in business terms as well as in creating a finance
are serious opportunities to gain the viability of business plans. In the function that is fit for future purposes. CFOs also acknowledge however,
competitive advantage in many Moreover, Big Data & Analytics is not coming years we will be discovering that they do not have the proper knowledge and competencies at their
sectors. To successfully reap the only about achieving higher business what this means for society at large. disposal to achieve this;
benefits, executives should adopt performance (and/or sales) but also The Big Data & Analytics challenge is
a broad perspective on the value about better ways to organise society. therefore not about collecting data, • Surprisingly, CFOs hardly see any role for Big Data & Analytics in
of data. We have an almost infinite amount of but more about translating data connecting the data of their own organisation with external sources,
information at our disposal about all into the knowledge and insights thereby missing the profound changes that Big Data & Analytics brings.
For starters, Big Data & Analytics is conceivable topics and up to highly that help to build a better society.
(not only) about deep analysis of large detailed levels. And yet, even now we
amounts of data. The true power of still seem to be unable to control the The (social) value of this is both organisations have better insights Companies that do not embrace this
Big Data & Analytics only comes to cost of care, to manage the financial unprecedented and inevitable. which support both operational and technology will probably be out of
the surface when data from different crisis or to solve environmental A new generation will organise strategic decisions; a finance function business because of competitive
sources – internal and external, both issues. For the first time in history we society in ways which are still barely which is thus more a ‘shaper’ than a disadvantage. In revolutionary times
conceivable. If we are able to deal ‘controller’. like these, missing out on the next
properly with the flip side of this game-changing development equals
development – such as privacy The finance function should be economic suicide. We have seen it
issues – Big Data & Analytics will inspired by experiences in other areas. with organisations that neglected
not be perceived as ‘Big Brother’, Take for instance the knowledge in the emergence of the Internet and
but as ‘Big Value’. the medical world which doubles in we are likely to see it again with the
volume and depth every few years. emergence of a data-driven society.
Given this background, it is no It’s only a matter of time before
wonder that CFOs acknowledge technology also helps in making The finance function must ensure that
the potential of Big Data & strategic decisions in a rapidly the organisation is a front runner in
Analytics. In our vision, CFOs should changing and complex environment, this field. Finance experts can play a
embrace Big Data & Analytics as a key on the basis of (financial) data on major role in transforming information
concept to shape a finance function markets, competitors, customers, into knowledge that leads to better
that creates value by making sure prices, weather conditions, etc. decisions.
Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 3

Introduction
Just twenty years ago nobody
dared to dream about being digitally
“Big Data & Analytics is
inter-connected. Now on the other about so much more
hand, and looking twenty years into
the future, we can see that digital than technology,
natives will be naturally immersed
in data and information. Every day,
resulting in business
the world creates the enormous ownership rather than
amount of 2.5 quintillion bytes of
data. Estimates say that 90 percent IT ownership”.
of the data in the world today has
been created in the last two years
alone. As a consequence, Big Data insights from large amounts of data
& Analytics is likely to become (obtained from within and outside
a key component of competition, the organisation) with the aim of
underpinning new waves of creating additional value. Big Data
productivity growth, innovation, & Analytics contributes to changes lead of the KPMG Data & Analytics, Figure 1
and consumer surplus by 2020, in information and how this acknowledges that IT is not the Function within the company of respondents
as pinpointed by our study ‘Six information is used to create value natural habitat for the analysis and
converging technology trends for customers and society. The use of Big Data & Analytics: “Big
Chief financial officer (CFO)
(2013)’. 1 study reveals that finance functions Data & Analytics is about so much 5%
predominantly take the lead in this more than technology, resulting in Finance director
15%
In April 2013, KPMG Advisory field, with the IT function involved business ownership rather than
34% Controller (Concern-, Group-)
conducted research involving the to a lesser extent. Sander Klous, IT ownership”.
finance departments of 170 Dutch 7% Director accounting,
companies, to which one third of reporting & control
respondents were in the Chief The findings of this study are illustrated in three Manager operafons & finance
13%
financial officer position, as sections, namely: Board member (eg. CEO, COO)
illustrated in Figure 1. The main • Big Data & Analytics awareness, 24%
objective of this research was to Other (eg. Strategic advisor
find out how financial experts • Big Data & Analytics as a competitive driver Manager business development)
perceive Big Data & Analytics in • Big Data & Analytics: a hot topic on the CFO agenda.
terms of the potential to gain

1 Six converging technology trends (2013)


Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 4

Big Data Awareness


Of the respondents, 68% 41% of respondents expect this to strategic value of Big Data & Figure 2
Is Big Data & Analytics a strategic subject of your management team?
indicated that their company happen within 3 years (Figure 4). Analytics in their organisation, thus
does not incorporate Big Data Roughly half of the respondents do placing it beyond the 3-year
Yes 32%
& Analytics in their strategy to not see the urgency of using the timeline.
optimise internal processes No 68%
and enhance decision-making
“Roughly half of the respondents do not
0% 10% 20% 30% 40% 50% 60% 70% 80%
(Figure 2).

Currently, only one quarter use see the urgency of using the strategic
Big Data & Analytics to improve
management information value of Big Data & Analytics in their Figure 3
(Figure 3).
organisation.” Are you using Big Data & Analytics to complete your management information?

Yes 24% 32%

No 76%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Figure 4
Are there plans to enrich your management information using Big Data & Analytics?

Yes, within 1 year 13%

Yes, within 2 years 17%

Yes, within 3 years 11%

No 46%

I don’t know 14%

0% 10% 20% 30% 40% 50% 60% 70% 80%


Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 5

Although Big Data & Analytics is a Figure 5 For instance, respondent organisations that do not possess in-house
well-known term, awareness of its How important do you think it is that Big Data & technical expertise do not see the urgency of Big Data & Analytics, nor do
importance seems to be hampered Analytics should be as part of your strategy? they have the capacity to implement this technology in their business
by uncertainty on the impact of this strategy. Other challenges mentioned by our respondents include not
concept. Although almost 40% Very unimportant 2% having sufficiently relevant data, having insufficient data or poor quality
perceive Big Data & Analytics as data (Figure 7).
Unimportant
an important strategic topic, 8%

more than half of the respondents Not important,


52% Figure 7
not unimportant
do not have a clear opinion on the Barriers organisations see when implementing strategies
matter (Figure 5). Important 37% around Big Data & Analytics

Very important 2%
Respondents see broad No budget available 20%
opportunities for Big Data & 0% 10% 20% 30% 40% 50% 60%

Analytics, and especially see Insufficient expertise in-house 35%


potential for improvement of Other strategic goals more important 45%
risk management, the quality
of service, incorporation of Insufficient (IT) infrastructure 22%
Figure 6
innovation in their offerings, and
Reasons why organisations should have a Poor data quality 24%
optimisation of the organisational strategy around Big Data & Analytics
costs (Figure 6). Limiting governance structure 3%
Product and services innovation 52% Insufficient capacity 35%
As a concrete example of e.g.
improvement of risk management Improve customer service 41% No support within the organization 18%
with Big Data & Analytics, one can
Optimising organisational costs 35%
consider fraud detection and fraud Not enough data available 10%
prevention within institutions. Improve risk management 54% Insufficient relevant data available 21%

Other 13%
Other 8%
0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60%
Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 6

Big Data & Analytics as a competitive driver


Big Data & Analytics is perceived developments in the market by the optimisation of information Our respondents were aware of Our respondents’ views on the skill
by 48% of the respondents as a analysing data. management with insights based the challenges involved in leveraging set of a successful data scientist fit
driver for competitive advantage. on data, resulting in lower risks, the bold promises of Big Data & nicely with the description offered
The perceived characteristics of this On a tactical level, 17% of our higher accuracy and therefore Analytics. Of the respondents, by Harvard Business Review: “a
advantage differ by organisational respondents state that Big better quality. Other statements 49% pointed out that Big Data hybrid of data hacker, analyst,
layer. This research focussed on Data & Analytics leads to mention insights beyond traditional & Analytics already has an communicator and trusted adviser”2.
three traditional organisational areas, superior marketing ROI. By measurements and interpretations, impact on both their business This involves investing in human
namely strategic (organisation wide, accurately profiling fast-changing promising cheaper delivery and and their finance function. In capital. Such investments need
five to 10 years horizon), tactical customer-needs and measuring better pricing schemes when aligned mainly decentralised organisations, to be supported by strong business
(business unit wide, three to four customer satisfaction, organisations with a transparent competitor’s miscommunication might occur cases and it is a challenge in itself
years horizon), and operational can improve their overall quality view. According to 16% of the when unstructured data is included to build a clear business case,
(operational units, zero to three of service and offer targeted respondents, better inventory in the analysis. Another concern since it can be difficult to quantify
years horizon). propositions based on data insights. control and compliance adds is the information overload disrupting the benefits. Our respondents
Respondents believe a data-driven transparency to the organisational people’s day-to-day activities. Hence, concluded that from a strategic
From a strategic angle, 44% of the organisation is powerful due to its structures and optimises processes, educated choices are required to angle, Big Data & Analytics is a
respondents pinpointed superior flexibility to adapt its offerings to leading to less bureaucracy and select data streams to be included hygiene factor that needs to work
decision-making (what we refer to changing markets. Secondly, our ineffectiveness. Respondents state in the analysis. properly in order to perform.
as data-driven decision-making) as respondents are confident that that additional data sources have to
the main competitive advantage. Big Data & Analytics insights lead be included in the analysis to achieve
Respondents see potential in basing to superior and reliable financial these benefits. These include
strategic decisions on real-time management reporting and external (non-financial) data, which
insights, in light of the latest trends controlling. are mainly unstructured and require
and developments in the market, innovative analysis methods to distil
with a transparent view of the We collected responses directly the necessary insights. One of the
competition’s landscape. Additio­ related to the implementation of respondents stood out by proposing
nally, respondents acknowledged strategic and tactical objectives and a solution to acquire external data
that combining insights within the classified them as operational. About streams: co-creation activities with
organisation with external sources 10% of our respondents mentioned other parties, not necessarily bound
may enhance their flexibility and examples of business opportunities to a specific market sector. Clearly a
speed to proactively respond to enabled by Big Data & Analytics, forward-thinker, ahead of his peer
changes in the market. They also see especially in the finance function. group.
value in extracting future trends and Most suggestions were related to

2 CIO.com: “Data Scientist Role is Clear Even If Job Description Isn’t?



Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 7

Big Data & Analytics;


A hot Item on the CFO’s agenda
53% of the respondents perceive success. Placing Big Data &
Big Data & Analytics as mainly being Analytics in the finance domain
the responsibility of the finance is in line with the trend to
function. Furthermore, 69% transform finance functions from
(Figure 12) of respondents see a scorekeepers to value creators.
connection with the IT department The finance function is increasingly
as a technical facilitator of Big Data expected to find ways to proactively
& Analytics, indicating the necessity contribute to the success of the 1) Reporting will increasingly Figure 9
Do you think Big Data & Analytics will impact your role?
of close collaboration between business and its competitive be aligned with business
both departments. 73% (Figure 9) position. Respondents indicate strategy; Yes 73%
of participants indicated that they that the need for business insights
expect Big Data & Analytics to has risen much faster than finance 2) Value drivers within the No 27%

change their current routines, departments’ ability to produce


organisation will be 0% 10% 20% 30% 40% 50% 60% 70% 80%
requiring them to enhance and add them. Big Data & Analytics can
additional capabilities in order to provide a tremendous boost in measured more accurately;
Figure 10
make data-driven decision-making a this respect: Where in your organisation should Big Data & Analytics be embedded?
3) Management focus will be
on the issues that really IT 24%
matter;
Risk 20%
Figure 8
Constructing and interpreting relevant insights from 4) Decision-making can be Marketing & sales 31%
data perfectly suits the finance function based on actual information
R&D/innovations 19%
instead of past performances.
Strongly disagree 1% Finance 49%

Disagree 14% Operations 22%

As shown below (Figure 10),


Neutral 31% Other 9%
49% of the respondents expect
Agree 48% the finance function to become 1%
Nowhere 1%
the orchestrator of internal and
Strongly agree 5% I don’t know 5%
external data analysis within the
0% 10% 20% 30% 40% 50% 60% next two years. 0% 10% 20% 30% 40% 50% 60% 70% 80%
Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 8

Furthermore, 82% (Figure 11) of parameters results in enhanced decision-making is essential in Figure 11
respondents believe that Big Data insights into what is actually order not to lose competitiveness. Do you believe that you will gain insights by combining internal
sources of information with external sources?
& Analytics will result in more happening in the business. Big Data & Analytics enables more
valuable business insights. accurate forecasts and budgets,
Additionally, Big Data & Analytics- thus radically changing the way Yes 82%
Business increasingly requires the driven reporting can supply these the finance function operates.
18%
finance function to incorporate broader insights and help discover No

non-financial data in their reporting, trends and knowledge which Respondents see a shift in the role 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

broadening the scope of information could not be discovered before. of the CFO and the finance function.
that has to be analysed; and to Increased quality and accuracy in The new finance expert thinks
provide broader insights for reporting will directly impact on differently, acts faster, and is not
decision-making. Reporting on organisational budgeting and a scorekeeper who tracks past Figuur 12
both financial and non-financial forecasting activities. Timely performances. The new finance IT will facilitate the technology and finance will analyse the data
expert uses real-time information
to give the business new and
Strongly disagree 1%
undiscovered insights that serve
as the foundation of value creation. Disagree 13%
The benefits discussed are
renowned, though these do not Neutral 17%

come without challenges. Data- Agree 59%


driven decision-making and Big
Data & Analytics by the finance Strongly agree 10%

function require organisational 0% 10% 20% 30% 40% 50% 60% 70% 80%
change, cross-departmental
collaboration, legal considerations,
and development of specific
analytical capabilities.
The broader scope and data input & Analytics. Laws and regulations
The broader data scope needed in also challenge an organisation to on data privacy are often complex
Big Data & Analytics and the use reconsider their data governance and not transparent and failure to
of multiple internal and external models as data governance comply may severely damage
data sources increase the challenge becomes more complex. reputations. Organisations should
of guaranteeing data reliability, Legal and ethical boundaries are therefore thoroughly consider the
consistency and completeness. often underestimated in Big Data ethical impact on society.
Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 9

Conclusions
Converting data into valuable Having said that, many
knowledge for the business will organisations lack the capabilities to
continue to be a key feature of act. More than one third of the
any finance function that has the respondents currently do not
ambition of being a value creator. believe that they have the right
Big Data & Analytics, if used capabilities in-house to analyse
properly, can serve as a valuable Big Data & Analytics.
means to transform finance
experts from scorekeepers to Therefore Big Data & Analytics will
value creators. Respondents to this require finance function members
study seemed to be aware of the to develop advanced analytical
potential. They were able to look capabilities to provide insights that
beyond the hype and indicated that impact on the organisations broader
the need for business insights has context. That may be quite a
risen much faster than finance challenge but also offers rewarding
departments’ ability to produce potential: organisations which
them. Big Data & Analytics can benefit from Big Data & Analytics
provide a tremendous boost in will have a competitive edge
this respect. Nearly half of the when it comes to better and
respondents expect the finance faster business decisions.
function to become the
orchestrator of internal and
external data analysis within
the next two years.
Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 10

purposes – all at the right time and services including finance transfor­
in the right situation.To help clients mation, controls optimisation,
gain that clarity, we use our industry regulatory compliance, policies
understanding to identify the right and procedures, shared services,
data and apply the right analytics to inter-company assistance, chart of
give organisations actionable insights. accounts assistance and more.

We believe that success isn’t just We can help our firms’ clients to
about having the right technology; align their finance organisations with
it’s about having the right people the strategies and needs of their
who can use that technology to businesses to realise and sustain
create actionable insights. That’s value over the long term. KPMG’s
why our approach melds the deep capabilities in the core drivers
technical depth of data scientists of change — process, organisation,
with the operational and industry information technology and risk and
insights of business people. control — can help organisations
transform their finance capabilities
Across industries, geographies to drive business value across the
and functions, our Data & Analytics enterprise while seeking to ensure
services are geared towards making the integrity of the processes and

About KPMG data relevant, to drive measurable


business value. We advise clients
on how to consume, produce and
information delivered to key
stakeholders.

govern complex information by using Financial Management teams serve


KPMG provides audit, tax and order out of complexity. Our Data & Analytics the right mix of historical, current our firms’ leading clients in all
advisory services. We work for a professionals excel in their own Success in our data-driven economy and predictive analytics. In short industries. Our professionals bring
wide range of clients: major specialist fields while also working is as much about learning and using we strive to play a central role and extensive experience and work
domestic and international compa­ closely together to provide the what you don’t know as it is about be a driving force in the Big Data collaboratively with clients.
nies, medium-sized companies, added value that enables our acting on what you do know. ecosystem with our motto: “Better
non-profit organisations and clients to excel. In doing so, Businesses need the clarity that life and better business”.
government institutions. The we draw from a rich source of comes from an organisational
complicated problems faced by our knowledge and experience capability to leverage data in many Financial Management
clients require a multi-disciplinary gained in diverse organisations forms, from many places, through Financial Management teams
approach that helps them to create and markets. many methods and for a variety of provide financial management
Big Data & Analytics: turning conceptual thinking into powerful results © 2013 KPMG N.V. 11

Contact

Sander Klous
Senior manager and team leader
KPMG Data & Analytics
E: klous.sander@kpmg.nl

Fred van der Waa


Partner
KPMG Financial Management
E: vanderwaa.fred@kpmg.nl

www.kpmg.com/nl

© 2013 KPMG Advisory N.V., registered with the trade register in the Netherlands under number
33263682, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Co-operative (‘KPMG International’), a
Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through
complexity’ are registered trademarks of KPMG International.

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