The Speed of Technological Change : The Role of the CFO
By Jackie Combine, CFO, Technology & Operations, Thomson Reuters [NYSE:TRI]
There is no better time to be a CFO. We have an abundance of opportunities to partner to advance the short and long-term goals of our organizations. Gone are the days when the finance function was looked at to simply manage the “purse strings.” In fact, CFOs of today are increasingly expected to drive strategic value across all facets of the organization. The traditional responsibilities are still there, of course—but the toolbox from which CFOs operate is changing.
Technology plays an increasingly important role in organizational success. Rapidly changing technologies create ever-expanding opportunities for organizations to improve their offerings and their margins. However, the rate of the technological change that many companies face today also presents some challenges: the need to balance internal demands and manage risks while at the same time maximizing earnings.
Successful companies will embrace these challenges as opportunities and have greater optionality to transform their business—leading to stronger long-term organizational health.
The ever-changing technology landscape creates opportunities for CFOs to partner with their CIO and CTO counterparts in ways that didn’t exist in the past. This is driving CFOs to think differently about their roles and their organizations—ultimately partnering to reshape the future of the firm and, in some cases, the markets in which they operate.
"Understanding the changing technology landscape and the opportunities within it is the ultimate enabler to influencing and supporting the business to succeed"
The evolution of technology in recent years has driven many CFOs to develop a far deeper knowledge and comprehension of the technology landscape. It is becoming crucial for CFOs to better understand areas including the enterprise “engine room” that powers the internal ecosystem, what customers value from technology, and local and global market trends, not to mention emerging disruptors in areas like FinTech.
With understanding comes insight, and with insight CFOs can add more value in the boardroom and help drive the technology-related changes needed for firms to stay ahead of their competition.
Partnering for Success
• There is an increasing shift to leverage the technology capabilities and platforms of partners—as opposed to building everything in-house. As companies redefine and segment their existing estates, they are looking more and more to partner firms to provide better or more economical solutions and services.
These “as a service” offerings can accomplish several goals:
• Reduce the amount of capital needed to keep the estate and infrastructure fresh
• Introduce agility, allowing companies to focus on core capabilities, fewer and more-strategic projects, and attracting the right talent to deliver on those projects
• Longer-term cost savings from leveraging partner scale, allowing the business to reinvest savings and accelerate growth
• Companies are hungry for faster time-to-market and lower cost-to-serve. Moving to newer technologies like cloud solutions, cognitive computing, blockchain, etc., is creating opportunities.
• To win in the competitive global marketplace, businesses are under pressure to continually redefine themselves and take advantage of market opportunities with urgency. There is no “one size fits all”—but as companies review how they do things, segmenting opportunities that lend themselves to new technologies presents customer benefits and financial gains.
• New methods, tools and processes also present opportunities in the form of increased efficiency and effectiveness—for example, the agile product development movement across the technology sector.
• Companies are also reaping the benefits of moving to more standard and less customized lead-to-cash, CRM and customer service systems. The use of industry-leading standards is freeing up additional capacity for new investments to drive growth and scale.
It’s a Balancing Act
Modern technology strategies are not without their financial challenges—not least of which is the burden of aging legacy infrastructure or technical debt, not to mention the investments required in new technologies.
CFOs are increasingly being leaned on to provide the strategic counsel to help manage this balance—considering both the short-term impact and long-term view in mind. How? By providing the facts. By balancing the possibilities, particularly as many of these themes start to drive a shift from traditional capital purchases to expense models. CFOs are ensuring that the organization is moving at the appropriate pace to harness opportunities while managing risks and delivering results.
While CFOs are not required to have a degree in engineering or computer science, or indeed to write code, technology and continuous advancements in it are here to stay. Understanding the changing technology landscape and the opportunities within it is the ultimate enabler to influencing and supporting the business to succeed.
Technology is not going away, and the CFO who stays abreast of the trends and who partners closely with CIOs and CTOs is uniquely positioned to drive growth, innovation and, of course, shareholder value.