CFOs are acutely aware of the importance of technology as an enabler for business performance and many are moving away from just analysing and reporting financial information, to identifying trends in order to contribute to key strategic decisions in the boardroom. As technologies mature, we will continue to see a more engaged role for the CFO in supporting businesses to adopt emerging technologies and adapt to newer technological trends.
The influence and impact of new technologies on financial management has been nothing short of a panacea and CFOs are more eager than ever to engage in meaningful discussions on pragmatic solutions. Artificial intelligence (AI), blockchain, and cloud integration technologies are touted as the silver bullet solutions to deliver operational efficiencies and strategic competitive advantage. What CFOs need today are technologies that can make a difference to their operations, solve real world problems, improve organisational performance and contribute to strategic decision making to help organisations remain sustainable and competitive.
Gartner, a strategic technology consulting firm, argues that the disruptive potential of AI, blockchain and cloud computing technologies will have a wider impact and use in organisations. It refers to this coalescing as an ‘intelligent digital mesh’ where a network of people weave together content on digital platforms and devices to create digital models that improve business performance.
There are many new forms of technology available today to explore for business use but there are five key technologies and trends that, if embraced, are likely to enhance business performance in 2019: Transbots, distributed ledgers using blockchain, performance management system integration, digital dashboards and anytime, anywhere technology.
Although AI is seen as being more relevant to business process automation, its impact in improving business performance is unquestionable; AI and the related automated learning have evolved to a point that they may become indispensable to finance. CFOs can rely on automated transaction processing bots, ‘transbots’ (akin to chatbots), which use established rules and parameters to process transactions with minimal human intervention.
For instance, AI algorithms and technology tools are already seeping into augmented business analytics to help improve performance. While AI won’t replace human intelligence, it will offer additional analytic capabilities that advance into the mainstream, offering CFOs enhanced data science platforms.
Interestingly, Software as a service (SaaS) vendor Workday has also announced that AI solutions have been incorporated into its human capital management (HCM) system to analyse core skills that make up a company’s workforce, with a focus on understanding future needs thorough predictive analytics. Data focused on analytics of human capital (people) will be collected and used to report on areas where a company might have difficulty hiring from, factors driving attrition and diversity within the workforce, and employee performance overall.
Distributed ledgers using blockchain
Distributed ledgers using blockchain is another innovation that enables enhanced business performance. Blockchain is a distributed digital ledger on the internet that not only records the financial transactions, but virtually everything of value. Blockchain is therefore ideal for handling transactions but can also be used by any business that relies on the exchange of information.
The technology can act as a foundation for distributed ledgers, where financial documents can be simultaneously edited and synchronised in real-time. This has the potential to create a reliable standard to not only verify business transactions but also improve transparency, saving time and money for businesses.
Blockchain technology is already revolutionising the food industry, for instance, the origins of food items can be tracked in the supply chain workflow, improving the traceability of food items. This capability allows retailers to quickly track where the bad quality food items came from, detect false transactions, and perishability of food products from the expiry dates. Major retailers such as Walmart, Nestlé, and Unilever are already establishing blockchain networks within their supply chains, and this trend will grow beyond 2019/20.
Performance management system integration
Cloud computing technologies are already being embraced by CFOs and Chief Information Officers (CIOs) across a broad spectrum of businesses. CFOs are focused on moving their planning, budgeting, forecasting and other performance management processes to the cloud. Studies suggest that in addition to staying current with technological advancements, the move to the cloud is for financial reasons, to avoid costly technology infrastructure, on-premise systems and upgrades, so that the total cost of ownership is minimised.
One of the real challenges for CFOs is to understand the drivers of business performance. Blockchain technology coupled with an integrated cloud computing environment enables a unified and transparent ledger allowing for an integrated performance management system, which will produce the ‘single version of the truth’ in terms of a business’ financial data interfaces and consolidations.
Despite being around for a few years, true ‘digital dashboards’ for executive decision-making haven’t fully arrived yet. Distributed ledgers, transbots and performance management integration could mean that executives may finally be able to make well-rounded decisions using real-time information. A unified view of the organisation with real-time insights will enable CFOs to respond quickly and be proactively armed with the right information at the right time. This will allow executives to spend more time on rolling forecasts and performance driven planning.
Anytime, anywhere technologies
Technology has brought people, information, and experiences closer together, physical distance is no longer a constraint and time differences don’t matter anymore. Global businesses are tapping into expertise from anywhere in the world, across industries and sectors.
Social and omnipresence technologies mean that people are connected to the world all the time using ‘anytime, anywhere’ (AA) technologies. Be it devices, spaces or a network, everyone is connected in some way to each other.
Organisations are leveraging technologies that connect not only devices and organisations, but also people. The most important shift in thinking will come from the transition to working in the cloud – sharing ideas, and knowledge, making use of shared spaces and data to improve business performance.
Time to explore
It is easy to see how these emergent technologies can transform the way people work within organisations, and how managers can use them to make quick, real-time, effective decisions for sustainable competitive advantage.
The challenge now is to explore these five, and other, technologies and trends, and assess which will work best to enhance the performance of your individual organisation.