How does technology impact finance during transformation?

Posted by  Ray Leclercq

This is a question I get asked a lot and it’s a big question. To answer the question I refer to Deloitte’s ‘four faces of the CFO’ framework.

The CFO’s leadership responsibilities and opportunities have grown beyond managing finances, measuring performance and delivering reports. Particularly in an organization undergoing transformation, a theme that categorizes most multinational organizations today. As the digital revolution is driving constant transformation throughout industries, business models, organizations and sectors around the world, the CFO has a lot to consider. This is new, and can be bewildering but highly profitable if understood and harnessed successfully in a business environment.

In a recent blog post, Leo Apotheker, an enterprise software industry veteran said: “Today, we’re at early stages of multiple massive technology trends that constitute a Fourth Industrial Revolution. The Internet of Things, growing artificial intelligence, robotics and automation, maturing cloud/social/analytics technology, augmented and virtual reality, and the explosive growth of mobile will all unleash new business disruptions… Consider that in the next 24 months, the planet will add more computer power than it did in all previous history. Technological change itself is accelerating. The sheer density and complexity of our digital world brings risk with it. Our technological infrastructure is becoming ever more complicated and interlinked. Businesses that don’t act, who stand still, will be left behind.”

Finance and technology may not sound a perfect coupling, but the role of the CFO and technology have never been more closely linked. Let me explain.

Face 1 - Strategist  

Transformation is all about change. To change successfully a company needs the right internal processes in place but it’s about so much more than that. It’s essential to formulate a well-defined strategy for the future, to ensure the company remains relevant and competitive in its chosen market(s) and with its customers. The right strategy ensures optimum business performance and creation of shareholder value, so the CFO must understand it fully. This can only be created with a thorough understanding of market trends, including what’s happening in technology in your industry. Without that knowledge, your strategy will fail. Technology plays a massive and disruptive role in supporting successful business strategy, defining disruptive business models and delivering execution.

Face 2 - Operator

The CFO should always lead a company in times of continuous transformation. That’s because success depends on the speed of change the company can absorb. How quickly it can adapt to and adopt change. This comes down to ensuring optimum efficiency and effectiveness, which go hand in hand with the implementation of sound finance practices and processes.

Face 3 - Catalyst

Continuous transformation is always more impactful on an organization than you might expect. That’s because typically people don’t adapt well to change and can become inhibitors to new regimes. The CFO is a change agent. It is our job to drive home the the need for and value of changes to the business, to align departments and empower people to be more productive so that the company strategy can be executed and so the organisation understands the consequences of failing to change. In times of transformation the CFO is not only accountable for results, execution and success but for initiating and leading change.

Face 4 - Steward

CFOs are typically responsible for risk and regulation in a business. Ensuring compliance and accuracy in the reporting of financial results and company risk profiles. In times of transformation, as new processes are implemented and a company moves from one phase to another, this role is vital to protecting shareholder value.

Today’s CFO

In the digital revolution, when transformation is essential to success, the CFO has to step up and embrace all four roles, or they will fail. Supporting the business in one of these four roles is not enough. Organizations have to embrace new models of technology and new ways of working in today’s digital age. The CFOs and companies that understand, embrace this change and utilize technology to the advantage of their people will be the winners.

Ray Leclercq

Ray Leclercq

Ray Leclercq was Unit4's CFO from 2014 to 2016 with responsibility for finance, IT and legal affairs. Prior to Unit4, Ray was Managing Director at private equity firm, the Gores Group, where he was responsible for portfolio company oversight and controls. He held CFO and CTO (Chief Transformation Officer) roles at Unify, a unified communications business and a joint venture between Siemens AG and the Gores Group and prior to that was CFO, BT Global Services and CFO, BT Openreach. He began his career in general audit at Coopers and Lybrand.