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The incalculable potential and potential pitfalls of the quantified organization

CFO Insights

In this issue of CFO Insights, we examine the rise of the “quantified organization”—what it is, the potential impacts on businesses, and what it could mean for chief financial officers.

Introduction

Science fiction can have a funny way of becoming science fact in the real world. Handheld communicators appeared to morph into cell phones.1 Computer-assisted cars may have presaged, well…computer-assisted cars.2 And gadget-laden wrist watches seem to have anticipated biometric fitness trackers.3

That last example likely has significant implications for business leaders. Advances in biometrics—once used primarily to authenticate someone’s identity using fingerprints or retina scans—have made their way onto the factory floor and office, enabling companies to track worker movement and safety.4 Similarly, wearables based on neurotechnology can now deliver detailed and accurate information about employees’ mental activity.5

Likewise, long-gestating concepts like AI and machine learning can now make it possible for businesses to process—and analyze—previously untapped sources of worker information. Email, for example, tends to produce voluminous amounts of data. Harnessed properly and appropriately, deep-learning tools can provide high-resolution snapshots of, among other things, worker interaction and collaboration, well-being, and engagement.

The upshot? Businesses may have an unparalleled opportunity to make operational and strategic decisions based on now-quantifiable facts, not assumptions. The information can help managers identify production bottlenecks and uncover unutilized skills across the business. For finance, likely applications include linking new sources of operational data to financial data to generate insights into what’s driving product or service demand and profitability in specific units. CFOs will likely have a part to play in other areas as well, such as risk management, compliance, and ROI analysis.

Wringing value from data collection requires thoughtful planning. Indeed, the collection of employee data tends to come with its own set of challenges. Senior executives should take great care to comply with rules and regulations governing access to, and use of, worker information. They should also address any worries workers or other stakeholders might have about tracking worker data. A key consideration: employers should strictly limit data collection efforts to employees who have been informed properly—and given their consent beforehand— regarding the data their employers seek to collect. Additional requirements and restrictions exist outside of the United States.

In this issue of CFO Insights, we examine the rise of the “quantified organization”—what it is, the potential impacts on businesses, and what it could mean for chief financial officers.

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Endnotes

1Why Captain Kirk's Call Sparked A Future Tech Revolution,” Forbes, April 3, 2013.

2Where to? A History of Autonomous Vehicles," Computer History Museum, May 8, 2014.

3How Science Fiction Influenced Modern Smartwatch Design,” Gear Patrol, March 11, 2022.

4Warehouses Are Tracking Workers’ Every Muscle Movement,” Bloomberg, November 5, 2019.

5Neurotechnology at Work,” Harvard Business Review, March-April, 2023.

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