It would be a mistake to think of industrial revolutions as fads. They are not. Neither are they passing fancies, flashes in the pan or any other short-term phenomena. No, industrial revolutions, including our very own Fourth Industrial Revolution (4IR), are nothing less than pages in history—massive upheavals in which the fundamentals of life are transformed forever, only to be transformed again by the next revolution.
Daily routines change; priorities change; roles change. In the Fourth Industrial Revolution—as post-crunch enterprises, including those in the Middle East, have tried doing more with less—the role of the chief financial officer has morphed from accounting overseer to business-development innovator.
Of course, discovering new revenue streams and reducing costs were always in the CFO’s domain. But emerging from the 4IR fire is a new focus: that of a strategist in charge of technology procurement and how it can enable improved financial analysis and reporting, strategy and forecasting, business process automation and risk management.
Some 39 per cent of IT organisations now report to the CFO, so finance executives must get to grips with technology and assume responsibility for the protection of data and networks. In the Middle East, we see this every day.
CFOs search for ways to gain control of IT costs and look to digital transformation to engage customers, empower employees, optimise operations and reinvent business models. This is exactly the kind of innovation now expected of these former accountants or financial analysts.
The cloud plays a huge part in their journey, allowing them to plan and structure technology costs and provide high standards of encryption and perimeter defence. Expansion of line-of-business capabilities through cloud-based applications is more predictable and less fraught with risk.
The building of staging environments to test new tools prior to deployment; subscription models that convert capital expenditures to operational models; advanced analytics and pattern detection that police networks looking for malicious behaviour; and many other cost-saving measures stemming directly from the cloud applications themselves—these are the benefits that the digital CFO seeks. Let’s look at some specifics.
Data is today’s fuel for tomorrow’s insights. Digital natives, new device categories and IoT sensors create it; warehouses consolidate and homogenise it; and advanced, cloudbased analytics applications use it, to monitor, predict, advise and optimise.
Visually rich dashboards are now standard tools for today’s CFOs, who are orders of magnitude better informed than their digitally bereft predecessors. This leads to real-time, intelligent decision-making, streaming from the intelligent cloud. The mammoth scale of the data lakes requires that these analytics tools be highly scalable, and the digital CFO needs to be aware of that.
They also need to demand intuitive interfaces and the highest standard of security from applications. The latest generation of business technology can anticipate business needs, and stay ahead of costly maintenance and business downtime, turning finance professionals from monitors into stewards.
Single, integrated views into their organisations allow digital CFOs to identify, assess and remedy potential issues, rather than wait for disruption. As any firefighter or doctor will tell you, prevention beats cure. For today’s CFO, the corporate equivalent of an earthquake or flood is a cyberattack.
By now, everyone is familiar with the spinetingling tales of infrastructure collapse or suspension of business operations caused by DDoS, ransomware, APTs and the like. The digital CFO’s predecessors were like sheriffs in a lawless land, facing an onslaught that seemed unstoppable without huge capital outlays.
Not so under the cloud paradigm, where cloud providers invest billions each year in cutting-edge cybersecurity (Microsoft alone invests $1 billion annually), to ensure that CFOs do not have to face the thorny trade-offs of yesteryear. Security is stitched into every layer of architecture and, as with everything else that resides in the cloud, costs drop because of operational models.
Today’s sales teams can be mobile, work from anywhere and generate leads, without concern that sensitive info will be compromised with the help of cloud based advanced security controls.
The information generated through this activity can then be fed into applications that merge ERP and CRM, unifying global financials and operations. This empowers finance executives to elevate performance and increase profitability, while enabling sales teams to turn leads into customers and nurture relationships through actionable intelligence.