Gordon Tucker, Managing Director, Internal Audit and Financial Advisory, Protiviti discussed the effect of big data in the finance world, and how CIOs and CFOs must work closely together.
Jason Redlus: Can you start us off with a little background on your firm and your role there?
Gordon Tucker: Protiviti is a global business consulting and internal audit firm specializing in risk, advisory and transaction services. We help our clients solve critical business issues in finance, technology, litigation, operations, governance, risk and compliance. Globally, we have 2,900 professionals across our consulting and internal audit solutions base, serving 35 percent of the Fortune 500 and Global 1000 companies.
Over the course of the last several years, we’ve seen a strong focus in financial services due to the amount of regulatory reform. We’re also seeing a lot of focus on technology issues around managing data governance, ensuring proper controls around new system implementations, managing security and privacy risk and improving performance on platforms like Microsoft SharePoint. Also, we are working with many companies that are preparing for a potential public offering. Those companies require support across a number of areas to get ready to operate successfully as a public company.
In my role, I oversee our Bay Area market and the firm’s technology, media and communications industry team, but day to day, I serve clients.
You talked a bit about big data. We hear it more on the CIO side, but particularly if you’re a CFO or in the finance organization, what does big data mean, and how does the finance world find value from it?
While big data seems to be largely a technology discussion, big data is focused on the business: what the business needs are, the value drivers of the business and what the business is looking to do in terms of capturing new customers, new markets or new applications for products and services. So the technology enablers should be driven by the business needs. Big data can have a transformational effect across the organization, and with new insights on the customer, the markets served and other aspects of the business, Finance can utilize that knowledge to advise the business on strategy, pricing for products and services and investments. In addition, there are implications to budgeting and forecasting activities given the dependency on utilizing the right data, as well as reporting implications connected to identifying and complying with local and global regulatory changes. Certain industries, such as retail, have been working with the concepts of big data for a number of years. Other industries are just getting starting and trying to determine what the value drivers are and how to best deploy big data capabilities.
What is driving this movement is a significant decline in storage costs over the last 10 to 20 years, coupled with a dramatic increase in all types of available data. Those two realities have created an optimal environment for big data capabilities to expand.
And then, stepping back from a CFO’s perspective, likely questions he or she would ask include: what’s the return on our investment in capturing, storing and deciphering this data? Do we have the right people to analyze and make sense of the data we capture? Do we have the right IT skills to handle and manage this data? The data captured can be very sensitive, so how are we securing it? Those are some of the major risks and challenges most CFOs would focus on.
"While big data seems to be largely a technology discussion, big data is focused on the business: what the business needs are, the value drivers of the business and what the business is looking to do in terms of capturing new customers, new markets or new applications for products and services."
So what inning are we in terms of organizations capitalizing on the opportunities from big data?
If you looked at it broadly across all industries, I would say we’re nowhere near the end of the game, and we’re past playing the National Anthem and announcing the starting lineups.
Are people in the right roles right now and have the skill sets to take advantage of this stuff? And do you see organizations bringing in new hires in order to take advantage?
There is no question that companies are looking at investments in big data skill sets. The market for big data tools and services is projected to grow 40 percent over the course of the next few years. There are companies developing their own products and services, or acquiring companies that have nascent products and services. There have been venture capital investments flowing into big data technology providers. The key skills that companies will benefit from include the expertise to identify, capture and utilize the vast data available to provide high-value insights and integrated analytics.
Touching on security, what is on people’s radar as it relates to security and privacy issues?
One of the first areas that most companies focus on is securing and protecting their data. The increasing use of cloud-based service providers raises the concern about the security of corporate data. Likely questions would be who has access to the data? Where is the data physically located and how is that location secured? How is the data protected from unwarranted breaches?
The more mission-critical the data is to a company, the more risk is associated with data security and privacy. With security breaches happening on a seemingly increasing basis, companies would be well served to continue revisiting their security and privacy policies and protection methods.
It sounds like the CFO and the CIO have their plates full both in doing everything that they always had to do as well as a number of new things on the horizon. How has the relationship between them changed? Are they working more closely together because they want to or they have to now?
Yes, the organizational connection between the CFO and CIO is growing closer. The issue that drives the success of the relationship between the CFO and CIO organization is the level of trust that’s been developed between the leadership across those two organizations. Trust can’t be ordained between finance and IT. It has to be built over time and through the successful planning and execution of strategic initiatives.
Where we see this working well in organizations is when there’s a solid discipline around executing IT strategies that are in alignment with business priorities. When those get separated and IT initiatives are not well aligned with the overall business priorities, that’s where the working relationship is more challenging.
"There is no question that companies are looking at investments in big data skill sets ... The key skills that companies will benefit from include the expertise to identify, capture and utilize the vast data available to provide high-value insights and integrated analytics."
As we near the end, is there anything else you wanted to make sure we touched on?
Something that is becoming a more significant issue for companies, which connects with some of the areas we’ve talked about already, is workforce mobility. Today’s workforce is much more mobile and needs to be able to work from anywhere on a variety of different devices. The impact of that demand for mobility, coupled with the increasing sharing of information through social media, gives rise to risks in the area of IT security and data privacy that are not going to decrease over time.
Gordon is a Managing Director in the Protiviti Internal Audit and Financial Advisory (IAFA) practice located in the San Francisco office. He also is market leader for the Bay Area practice. Additionally, Gordon is the Industry Leader for the Technology, Media and Communications (TMC) industry.
Gordon is a past-Treasurer and a current member of the Board of Governors for the San Francisco Chapter of the Institute of Internal Auditors.
Gordon began his career with Andersen's Boston office in 1984 in the Audit Practice. He transferred to the San Francisco office in 1989 and to Andersen's Business Consulting practice in the mid-1990's where he became Partner. Following Andersen, he spent a year and a half at BearingPoint as a Managing Director.