CFOs: Surviving in a New Era - AGA

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“The government as a whole is not staffed to use predictive
and statistical analytics. It employs people who are good at
compliance and compiling data, but not in analyzing data.”
— a federal executive
high frequencies of a problem. They did that map
without digitizing the data. So maybe we do not
need to digitize everything. There are tradeoffs, of
course, but we have to be practical about it.”
Federal executive survey respondents believe that
the financial personnel inside CFO organizations
will need to improve their skills in applying or
using predictive analysis for the benefit of their
entire entities. Asked to rate these skills on a 1 to
5 scale with 1 = not at all skilled and 5 = highly
skilled, respondents gave their personnel a 2.7
mean score (see Figure 4). Some executives think
they may need to recruit new professionals with
financial and statistical training in order to deliver
data models that predict and analyze fiscal and
other information. Says a federal executive, “The
government as a whole is not staffed to use predictive
and statistical analytics. It employs people
who are good at compliance and compiling data,
but not in analyzing data.” Barriers to re-staffing
for skills that are more analytic include personnel
cutbacks and hiring freezes.
Figure 4:
Federal executives’ rating of their financial staff’s skills in
predictive and statistical analytics
Not at all skilled
1 2 3 4 5
Personnel
Highly skilled
How CFOs can help nonfinancial
operations with analytics
More serious is the problem of lack of demand
for predictive and statistical information by nonfinancial
executives and managers. Says a federal
executive, “CFOs need to gear up to tell their
bosses, ‘I’m not just throwing reports to you anymore.
My job is to get you to change around the
things that I am reporting.’ Analytics just makes
that happen quicker.”
We asked federal executives what they would
recommend to top leaders concerning the use
of predictive and statistical analytics, and how
CFOs could help nonfinancial operations with
such analysis. Many of the answers to both
questions started with pointing out shrinking
budgets. Outside of entities whose mission is
mostly monetary (e.g., making grants, loans
or guaranties), financial risk alone may not
be enough to galvanize elected and appointed
leaders. Says a financial executive involved in
risk management in a research and development
entity, “We need to help nonfinancial operations
use predictive and statistical analytics to set
priorities for programs and entity needs. That
means helping them understand priorities, the
financial cycle of a project and how to reduce
program entitlements — in other words, how
to make hard choices.”
Recommendations for how financial functions
can help nonfinancial operations include:
• Strive to integrate financial and nonfinancial
analytics, such as associating costs with business
process options or combining budget and
performance data. Says a financial executive,
“You can use financial indicators to detect
nonfinancial issues, such as improving the
accounts receivable or payable entry processes