• Strategy
  • CFO Research Services

IQ Matters: Boosting Information Quality

By improving the quality of their management information, finance and IT executives expect to make better operating decisions more quickly, perform better annual planning, and have greater confidence in business process controls.

A majority of business decision makers don’t have ready
access to high-quality, reliable, useful information on operating
and financial performance at their companies — so say senior
finance and IT executives in this global study of information
quality (IQ). As a result of this IQ shortcoming, decision
makers are forced to spend time building special reports
and analyses and reconciling the “multiple versions of the
truth” provided by their disparate, non-integrated business
processes and IT systems.

But finance and IT executives see real value and investment
return in improving the quality of their management
information — in boosting its timeliness, accuracy, and
transparency. They foresee broad benefits, including the
ability to make better operating decisions more quickly,
better annual planning, and greater confidence in business
process controls.

To remedy their uneven quality of information, companies
are investing in process simplification and tighter integration
of their IT systems. Doing so, say survey respondents and
executives interviewed for this study, requires not just
time, money, and attention, but also a new and much closer
collaborative relationship between the CFO, the CIO, and
their teams. This new relationship calls on finance to take
greater responsibility for information quality and for companies
to instill accountability for IQ throughout their organizations.
Collaboration, responsibility, and accountability may not
be enough, however, to solve the IQ problem effectively.

Companies’ IQ and the collaborative relationship between
finance and IT will benefit from the CFO and the CIO building
their real knowledge of the other’s discipline. When
finance comes to understand IT — its capabilities, limits,
and role within modern enterprise — and when IT comes to
see robust financial thinking as a source of business value,
and not just of cost control, companies will be on a path toward
higher IQ and sustained operating and financial improvement.

In the summer of 2005, CFO Research Services (a unit of
CFO Publishing Corp.) launched a research program to
explore the quality of management information and its
proficiency in meeting information needs at large companies
around the world. Through a survey and interview program
among senior finance executives in North America, Europe,
and China, we sought to understand how companies rate
their information quality — its accuracy, timeliness,
reliability, and transparency — and their capabilities in
providing information relevant to achieving governance and
performance objectives. We also sought to document how
the chief financial officer and the chief information officer
are working together in new ways in an effort to boost
information quality. This report contains our findings and
was prepared in collaboration with Deloitte Consulting LLP.

All told, we gathered 385 responses to the survey, two-thirds
of which were from executives at companies with more
than $1 billion in annual revenue. Seventy percent of
respondents are from North American companies, 22 percent
are from European companies, and 8 percent are from
Chinese companies. We sought to include both finance and
information technology executives in this study. Executives
with top finance titles such as CFO, controller, and vice
president of finance make up 64 percent of respondents,
while IT executives — including CIOs, VPs of IT, and directors
of IT — comprise 18 percent of respondents.


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