5 things CFOs need to consider to survive the 4th industrial revolution
Posted by Noelia Gomez Rivero
We all studied the 1st industrial revolution, we all have experienced the 3rd industrial revolution, the digital revolution and now we are at the beginning of the 4th industrial revolution, with artificial intelligence, robots, cloud solutions, IoT and a number of other buzzwords taking over the traditional work environment and transforming it exponentially.
What is the impact of the so called 4th industrial revolution? While we don’t know the full impact yet, we know one thing or two:
- The pace of the business world is increasing and the lifespan of companies is clearly decreasing. Looking at data, the lifespan of companies in the 60’s in the S&P 500 was 60 years. It is now down to 14.
- The job market landscape is changing dramatically. Manual and repetitive jobs are being heavily automated (and self-learning systems will only increase the number of automated tasks) while jobs we never even dream of are appearing and in high demand.
- The amount of data we generate is far more than what we can consume and the latest systems are competing not in terms of data quantity but easiness to present and digest actionable data.
Most companies are feeling threatened not only by new technologies but the new economy companies resulting from them, from sharing economy companies such as Airbnb to disruptive technology companies such as Netflix.
The CFO role is changing accordingly and exponentially quickly. The finance department is going through a transformation that the CFO will need to lead. To successfully implement that transformation and support their companies through the 4.0 World, there are 5 critical things CFO need to consider:
- The finance function is being transformed at the core. Manual jobs will disappear and more time and effort will need to be spent not only on financial data but on managing all kind of market data, customer data etc. A successful finance team will be the one who equipped to generate relevant insights and generate recommendations accordingly.
- Your CEO will need support stretching over finance to market information, competitive information, customer information and strategic information and the expectation is that the CFO gets more involved in non-finance related topics to be able to have a formed opinion on strategic matters.
- Technology will be the enabler of most of the changes and it will get more and more integrated into the business world. As the CFO you and your team will need to develop the knowledge to assess which solutions you need to get ahead of the competition on data analytics or otherwise.
- Your team skillset will need to be adjusted accordingly. As a CFO you will need to coach the team to go through the right changes to adapt their skills to future requirements.
- The World 4.0 is not necessarily a threat, it is also a large opportunity to innovate, get ahead of the competition, increase your revenues and success. While naysayers are busy seeing the glass half empty, successful CFOs are so because they get on with the job, can see the opportunities and have a clear vision about how to reach them.
So while the world seem to be going faster than us, there are ways not only to catch up but to keep up and even overtake.
If you want to learn more, join us on our webinar on the 30th of November at 4pm The world goes faster than us: adapting finance to the new economy changes