BIG DATA SIGNALING IN ANNUAL REPORTS: DOES THE

PRESENCE OF A CHIEF DATA OFFICER (CDO) SIGNAL BIG

DATA INITIATIVES IN ANNUAL FINANCIAL REPORTS?

- AUTHOR - LISA KRALINE, ANDERSON UNIVERSITY, INDIANA, USA

- ARTICLE REVIEW – DISHA JOSHI
OBJECTIVES OF THE ARTICLE

Understanding value derived by big data

Importance of CFO and CDO partnerships

Impact of big data on Annual reports

Keywords and it’s impact on investors

Further study of decision making implications, determination of roles and predictions of industry
behaviour
BIG DATA – MEANING AND ITS IMPLICATIONS

 The advent of big data has created a paradigm shift to the extent that it is termed as “Industry Revolution”.
 Big data can be defined as large, diverse, complex, and/or longitudinal data sets generated from a variety of
instruments, sensors, and/or computer-based transactions. [1]
 It is termed as big data because of it’s variating dimensions which are prone to constant changes hence
invalidating any interpretable patterns. Thus, making it difficult to fit it into the traditional financial models.
 “Data is the lifeblood of every industry working to reinvent itself in the modern age. Companies that use data will
thrive and grow; companies that don’t will fall behind” claims Intel’s shareholder letter. This can be substantiated
by the fact that information or data is termed as asset.
 Big data is a challenge to the old school methods of strategic decision making models like minimizing costs,
differentiating products, projecting sales etc.
BIG DATA – MEANING AND ITS IMPLICATIONS

 Previously the corporate strategy dictated what data to be collected, analysed and presented to the stakeholders
but it’s a reverse process now, the corporate strategy is designed after deriving inferences from big data and
business analytics.
 Thus merger the finance and technology brings into existence a new branch – FINTECH where the CEO and
CDO align their objectives to channelize data initiatives, decision making and building anaylitical capabilities.
FINDINGS AND CONCLUSIONS

 150 annual reports of top Fortune 500 (F500) companies and top Fortune Fastest Growing (FFG) companies are
examined by content analysis using eighteen predetermined keywords. CDOs are executive leaders in 64% of
companies. FFG companies with CDOs use 58% more keywords than non-CDO FFGs, while F500 companies
with CDOs use 12% more keywords than non-CDO F500s
 Tech-savvy CFOs with CDO partnerships are best positioned to harness the complexity and benefits of big data.
“Companies tend to get comfortable doing the same thing revolutionary ideas drive the next big growth areas,
you need to be a bit uncomfortable to stay relevant.” An IBM annual report warns companies not to
accommodate big data but to lead it as the world becomes “instrumented, interconnected and intelligent”.
 The results of this empirical study suggest that CDO presence is associated with more frequent signaling of big
data initiatives in annual financial reports. 150 annual reports of top F500 companies and top FFG companies are
examined by content analysis using eighteen predetermined keywords. The results show that 64% of companies
employ a CDO as an executive leader, and companies with CDOs use 30% more keywords on average than non-
CDO firms.
KEY LEARNINGS

 Big data, business analytics, machine learning, artificial intelligence, cloud computing etc. are redefining the
conventional practices adopted by the corporate organizations. Industry is going to witness a major revolution
which will embellish it with a vibrant perspective, enabling it to define new strategies, increasing efficiency and
efficacy.
 Big data is here to stay. Annual reports are signalling the rise of data based initiatives. CFO and CDO
partnerships shall entail productive outcomes at different levels for different sectors.
REFERENCES

 Megahed F, Jones Farmer L (2013) A statistical process monitoring perspective on big data. New York: Springer.