Persuading the CXO
Gaining senior executive support takes planning, knowledge and savvy.
Large projects are doomed to failure unless stakeholders have secured appropriate buy-in first. But getting that buy-in for an ambitious and cross-functional business intelligence (BI) or data warehousing project isn’t a color-by-numbers exercise.
On the contrary, success often directly depends on your ability to “sell” the C-level executives in your organization.
“If you get the executive support you need, your project will get the funding and attention it needs. But if you fail to get that buy-in, your project will fail, because nobody will consider it a priority, so they won’t commit to making it a success,” says Henry Morris, senior vice president for Worldwide Software and Services at IDC, a market research and consulting firm. The key to getting through to decision makers is careful planning and knowing the hot buttons to push at each decision point.
CEO: Ingenuity Is a Must
CEOs typically manage a portfolio of businesses and product lines. Each line of business often has a large number of systems—including research and development, enterprise resource planning (ERP) and collections. Working with large numbers of disparate systems creates complexity that makes analysis and efficiency difficult, if not impossible. This, in turn, inhibits innovation. In other words, CEOs need to leverage the size and breadth of the organization’s total knowledge even though it is operated as dozens of small, distinct businesses.
“Successful companies all go through a life cycle of developing innovative products or services, extending their sales and distribution to increase revenues and improve operations efficiencies to enhance margins in both expanding and mature markets. Depending on where CEOs feel their companies, operating divisions or product lines are in their individual life cycles, they may want to leverage enterprise information management and analytics to enhance the strategic planning process, increase revenue generation, improve operational efficiencies (performance management), and better manage risks inherent to their business model/industry,” says Glenn L. Gutwillig, partner and executive director in Accenture’s Analytics Practice.
Consider these CEO goals when pitching a project:
- Grow. CEOs use information to explore opportunities that would expand business lines and products. For example, one company’s main business was to compile a database of automobile accidents. By expanding to a data warehouse and performing targeted, what-if analyses, it was able to create new products and new markets.
- Save money. Each division within an organization needs materials. With a data warehouse, the buying needs and patterns of all divisions can be analyzed to gain purchasing advantages.
- Leverage resources. When a company is developing a new product, it makes sense to leverage existing designs from other products or divisions, as well as parts or components already in use. With a data warehouse, this is a relatively simple exercise, but without one it could be like looking for a needle in a haystack.
- Improve sales. Getting a 360-degree view of the customer is critical, especially for enterprises with multiple product lines. That requires analyzing buying patterns and demographic data. An insurance company that offers many types of insurance—health, dental, life, home and auto—could look at individual customers across all relationships to identify cross-sell and up-sell opportunities.
CFO: Visibility Is Required
"Know what you’re proposing, and know what pain points it will address. That’s what will convince someone."
—Henry Morris, IDC
CFOs are charged with budgeting, forecasting and compliance, all of which require a clear view into every part of the business. They must know how much each division will sell, buy and manufacture; what the profit-and-loss statement is for every operating group/unit and major customer segment; and how much to invest in variable expenses like product development, marketing and sales. That’s a tall order made even more complex by reorganizations, mergers and acquisitions; regulations such as Sarbanes-Oxley; globalization; and internal rules, reporting structures and systems employed by different divisions.
Without visibility into these and other industry- or mission-specific variables, the CFO can’t understand the organization’s financial status in a way that moves it forward. Gutwillig notes: “With access to trusted, standardized financial data from all operating units or divisions, CFOs can analyze the information to generate more accurate business forecasts and reporting, as well as look for synergies among systems and departments, that ultimately can drive improved performance and greater profits for shareholders.” CFOs need to:
- Justify expenditures. It’s the CFO’s job to make sure expenditures provide value to the company. Without full visibility into the variables related to specific expenses, it’s virtually impossible to ensure that missteps won’t occur. For instance, advertising is a vital part of every business, but its effectiveness can be hampered by unforeseen issues. The CFO needs to know that spending $4 million on a campaign targeting a specific product will result in the intended benefits. Doing so entails examining all variables, including store inventory and manufacturing capacity. Without that visibility, stores could come up short, wasting millions in advertising money and frustrating customers.
- Evaluate risk. Should we extend credit to a particular retailer? The CFO can quickly assess the pros and cons, even across departments, and make an informed decision. Likewise, should we sell an asset during this quarter? Quick access to accurate data makes it easy to determine the impact on the current quarter’s finances and decide whether to sell the asset now or next quarter.
- Report accurately. Without visibility into the spending and profit data from each division, reconciling and closing the books each quarter as well as complying with government regulations becomes time-consuming and inefficient, with a greater potential for errors.
CIO: Complexity Must Be Conquered
CIOs are looking to reduce their technology stacks and make them more manageable, which is a herculean task for organizations with hundreds or thousands of transaction systems. That means reducing to single systems for ERP or customer relationship management (CRM), etc., as well as replacing multiple data marts with an enterprise data warehouse (EDW).
“For CIOs to manage information, they need to be able to govern how information is sourced and managed—the quality, security and timeliness of data,” Morris says. “That means they need to have the processes and infrastructure to help the business control its changing environment.” They seek:
- System consolidation. The CIO can use an EDW to consolidate ERP or CRM systems more easily and quickly. It’s possible to load all data from extraneous ERP systems into an EDW to retain important legacy data, retire unneeded systems and consolidate onto the preferred system. And by consolidating data marts into a single platform, the cost of IT operations decreases. But more importantly, it creates better use of equipment and skilled personnel.
- Management of unstructured data. CIOs need to integrate and manage terabytes of data in the form of text documents, presentations, spreadsheets, engineering drawings and Web data. Many enterprises have employed content and document management systems to store unstructured data, but data warehouses can go one step further by combining stores of this data with structured data from other systems. As a result, users can quickly pull together related data, regardless of type, from a single source.
Persuading a C-level executive comes down to two things—preparation and relevance.
“Business intelligence is about improving decisions—tactical, operational or strategic,” Morris says. “Know what you’re proposing, and know what pain points it will address. That’s what will convince someone.”