The CFO of the future: smarter systems, better decisions
Mark Nittler, VP enterprise strategy at Workday, looks at the evolving role of the CFO and the future impact of digitisation
When it comes to technology in the workplace, the decision making process has historically been the responsibility of the IT department or chief technology officer. This is no longer the case, with many C-suite execs now making decisions on which processes are digitised and how IT budgets are allocated. One recent survey found that a huge 94 percent of CFOs have some level of involvement in a number of IT decisions.
As the role of the CFO continues to evolve, these are the three key areas that they should be focusing on as we enter the new calendar year.
The consumerisation of IT
What the “consumerisation of IT” means is that the more familiar employees get with user-friendly consumer tech products like Facebook or Dropbox, the more they expect their company’s tech to behave in the same way.
Companies need to update their programs and apps so that they’re more consumer-friendly or let staff use their own programs for work purposes — in line with the bring-your-own-device movement, which many companies pushed back on before realising it was more productive to allow staff to use the devices they were most comfortable with.
If employees aren’t allowed to use the latest tech or if company software isn’t sufficiently user-friendly, then staff could go rogue and adopt programs IT doesn’t endorse. Companies should be taking software suggestions from employees. CFOs can try out suggested solutions in smaller groups then if a program works, a CFO can roll it out to the wider enterprise.
Your trusted machines and predictive analytics
Meanwhile, data analytics are becoming more important to companies. Analytics can help focus a CFO’s attention on a particular business problem. CFOs who can use data to gain insight into an issue are the ones who are using data right.
Naturally, every division head wants resources allocated to his or her department. Predictive analytics can help a CFO determine which area might get the best return on investment, according to a Financial Executives Research Foundation report.
Analytics can also help drive operational value, reduce costs and improve efficiencies.
On the consumer-facing side, analytics have created the “trusted machine” — an app, program or tech-related service that already knows what a customer wants. An example is Google Maps, which knows that, when you get into your car in the morning that you are going to the office and would probably benefit from data on how long it will take you to get there.As data collection and analytics become more powerful, companies will be able to fulfil consumer needs in advance.
Within companies, these same trends will lead to smarter systems that help employees choose the best course of action. Analytics can help determine the ideal hire, what task someone needs to complete next or if someone is expected to meet his or her targets. Enterprises should look to the consumer world for inspiration and find ways to creatively combine existing data sources and technologies to create new innovations that benefit employees, partners and customers.
The digitisation of everything
We hail taxis on our phones and we buy clothes without leaving the house. Yet many companies are still doing things the way they always have been.The digitisation of everything is exactly what it sounds like — everything we do these days is informed by technology and companies have to take that into account.
For enterprises, this means interacting with suppliers, employees and consumers in a far more digital way.
On the employee front, companies may want to adopt internal social media networks so staff members can communicate with one other like they do on Facebook or Twitter. This might take the form of making information available to a broader set of employees, decentralising decision-making and moving away from “gut instinct” decisions to ones that are data-driven.
Many businesses will need to start thinking of themselves as technology businesses, even if they’re not making digital products. Every department will need to incorporate new technologies and embrace innovation as an ongoing effort. They’ll need to figure out how to improve efficiency with technology. And in many cases they’ll need to think more like start-ups with flat structures than corporations with big bureaucracies.
At the same time, it all has to come back to providing value for customers. Part of the CFO’s job will be answering this question: How will this investment in technology ultimately help boost profits? In some cases, technology drives efficiencies that help lower costs. More interesting are technology investments that help drive new sources of revenue or open up whole new business models.
There are other trends out there too, such as greater adoption of cloud computing and robotics. The CFO needs to be mindful of all of them.