The widespread acceptance of Big Data, advanced analytics, and cloud technology has quickly transitioned the CFO role from financial controller to highly strategic partner. The competition for finance expertise, attention, and time has only intensified as its influence permeates across the operation of every line of business.
While many executives herald this evolution as transformational and groundbreaking, the latest crop of innovations is proving that CFOs have yet to scratch the surface of the full power of finance. According to the Deloitte perspective “2017 Tech Trends,” eight emerging trends are beginning to test the boundaries of the IT organization and elevate the capabilities of every business area.
Finance is certainly not immune from such change. New risks, responsibilities, and challenges will undoubtedly arise, but core financial skills remain critical. How can CFOs marry this next-generation digital revolution with the strategic and disciplined nature of finance? Here’s a sneak peek at what technologies are coming and the opportunities they bring.
1. The unbounded IT organization
For decades, IT has focused on maintenance and support of systems often walled off from other parts of the enterprise. But technologies such as software-as-a-service (SaaS) are increasingly procured and operated without IT intervention, and IT must become faster and more responsive to the business. To meet these new demands, CIOs are transforming IT operations and empowering their employees to go beyond traditional roles and activities and focus more on differentiating innovation.
How CFOs will benefit: As IT builds an integrated view of project objectives and technology implications, CFOs can engage in technology conversations rooted in a balance of risk and return. Instead of maintaining extreme positions to protect the finance function from possible risk, the CFO and CIO can work together to determine probable and acceptable levels of risk and better understand exposures, trade-offs, and impacts.
2. Dark data analytics
Advances in computer vision, pattern recognition, and cognitive analytics are shining a light on billions of unexplored structured and unstructured data sources – known as dark data. Deriving insights from this hidden trove of information not only leads to a better employee and customer experiences, but also more accurate, faster, and actionable decision making across the entire business.
How CFOs will benefit: The use of dark data in strategic decision making is an exciting opportunity; however, most organizations are too digitally immature to realistically consider it. Since the finance area manages and uses most of an enterprise’s data, the CFO can sign up the team as an early adopter of supporting technology. The function can apply predictive analytics to get a better view of what the information is foretelling, with an in-memory-based digital core to accelerate processing and cleansing applications to help ensure data accuracy. More important, it can model, advocate, and guide all other departments to do the same.
3. Machine intelligence
Although the business cases for artificial intelligence is gaining steam, the bigger story that is getting ready to bloom is machine intelligence. This collection of advances represents an entirely new cognitive era that has evolved rapidly in recent years. As spending on this technology reaches nearly US$31.3 billion by 2019, uses cases will be introduced and refined as companies tap into the power of machines.
How CFOs will benefit: Sophisticated algorithms and analysis techniques enable finance to solve complex scenarios, automate redundant and low-skill tasks, and focus more on delivering strategic and meaningful outcomes. The ability to acquire real-time insights, put them into action, and automate tasks and responses represents new business value for finance.
4. Mixed reality
This controlled convergence of augmented reality (AR), virtual reality (VR), and the Internet of Things creates new environments that allow digital and physical objects – and their data – to coexist and interact with one another. By shifting engagement patterns, more natural and behavioral interfaces are supported. These interfaces empower users to immerse themselves in virtual-world sandboxes, while consuming and leveraging digital intelligence generated by sensors and connected assets.
How CFOs will benefit: This technology connects devices to a data platform that centralizes all data throughout the enterprise and documents each step of the process. Plus, adoption of advanced analytics can help predict demand patterns quickly and optimize production.
5. Open architecture, cloud-first design
The arrival of open source, open standards, virtualization, and containerization is prompting many organizations to overhaul IT landscapes. This cloud-first model of loosely coupled best practices and platforms help automate systems to enable self-learning and self-healing.
How CFOs will benefit: On-premise, private cloud, or public cloud capabilities can be deployed dynamically to optimize pricing strategies, operational performance, and supplier engagement. All combined, these elements can help the business move broadly from handling instances to managing finance-driven outcomes.
6. “Everything as a service” (Xaas)
Transforming existing business products, processes, and legacy systems into a collection of services that can be used both inside and outside the organization can help streamline IT operations and, potentially, generate new revenue streams. XaaS provides an opportunity for enterprises to push beyond traditional boundaries to serve customers, engage business partners, and surpass competitors in new ways.
Take Amazon, for example. The online giant is extending its internal services for e-commerce operations to customers outside the Amazon organization. This approach encourages customers to remain loyal to the retailer and motivates the company to continue its track record in unparalleled service.
How CFOs will benefit: Evaluating business models, processes, and strategies through an XaaS lens helps spotlight new opportunities to increase revenue and efficiency. By learning new core modernization techniques, CFOs can extract more value from legacy assets while laying the groundwork for a service-oriented future.
7. Blockchain and the trust economy
Shedding its reputation as Bitcoin’s enabler, blockchain is making it possible to share information selectively with others and exchange assets and contracts safely and efficiently. By baking into each individual’s or organization’s interactions a reputation of trust, blockchain innovators can move from securing and handling digital rights to transferring them smoothly and immediately without the need for human intervention and full traceability.
How CFOs will benefit: Blockchain provides CFOs with a distinct path to tapping into the full potential of their digital investments. This capability touches every finance process from real estate management, stock market performance validations, entitlements, and recycle registries to smart contract protocols that digitally facilitate negotiations, verify the agreement, and enforce compliance with terms.
8. Quantum computing
Although a business case for quantum computing technologies has yet to be fully defined, there is an active race underway to create a commercially viable solution for harnessing quantum technology. As seen before with a variety of emerging technologies, early adoption could bring competitive opportunities that would surprise even large or fast-growing rivals.
How CFOs will benefit: Supporting algorithms and data modeling, quantum computing could make predictive risk analysis a more valuable component of risk management. As data volume continues to grow exponentially and cyber-risk management becomes more complex, this theoretical computation system could eventually represent a game-changing leap in capacity, detail, and insight.
The final word on innovating the future of finance
The intense evolution of technology may be pushing the boundaries of traditional ways of getting work done, but it is also a critical part of accelerating growth. For CFOs, this is an incredible time to engage in forward-thinking and creative innovation that empowers an organizational dynamic that benefits every line of business, every stakeholder, and, most of all, every customer.
Please attend this presentation at SAPPHIRE NOW, Finance in a Digital World and the Impact on CFOs, Tuesday, May 16, 1 p.m. EDT, moderated by John Steele of Deloitte Consulting LLP.