The rapid evolution of emerging technologies and the impact this has had on business has propelled technology executives into the C suite across most industry sectors. This has generated much discussion and activity around the new responsibilities and skill sets technology executives must accept and master. A great deal has been written to advise and assist CIOs and CTOs become leaders and successful contributors, setting and executing strategy for businesses on the path to digital transformation.
All of this is positive and will strengthen the individuals and organizations to the extent that they adopt the advice. Not so much attention has been given to the other members of the C suite – CFOs, CEOs and Board members who are also incurring new responsibilities and the need for new skills as businesses develop models focused on emerging technologies.
CFOs in particular need to recognize the expanded responsibility they have as business uses technology to develop new deep relationships with customers, suppliers, employees, regulators and shareholders.
Navigating Digital Transformation
The technology chiefs will have responsibility for knowing, recommending and implementing technology – dealing with the detailed, system integration, deployment and operation of infrastructure and applications.
The CFO’s responsibility is the financial impact of digital transformation on the enterprise and that can be extensive in ways that never came into play before.
To be clear, the focus for the CFO and C suite should be the management of technology’s role in the business and not the technology itself. Technology is evolving rapidly and promising so many attractive potentials that it is tempting to take on an aggressive agenda seeking benefits across an array of technologies. By focusing on strategies to manage technology the C suite can safeguard and promote the future of the business.
The CFO is responsible for weighing the value of all technology investment. He or she must consider each investment in the context of the entire business. For example, a customer experience improvement must compete with a new marketing campaign and literally countless other ways of investing the business’s resources. Steps to reduce cost through automation or outsourcing need to consider the effect on customer service and ability to develop new product.
Near term decisions need to allow for strategies to future proof the business, to remain flexible and able to respond to changes in the market as customer needs change and technologies continue to evolve.
Managing Cyber Security and Risk
Cyber security has become a major responsibility for the CFO and his peers. A security strategy to prevent compromise is essential. A strong combination of internal and external security protection must be in place. Equally important is a robust, rehearsed response plan for when security is compromised. The financial implications of a security breach are severe and far reaching.
Research conducted by the National Cyber Security Alliance found that as much as 60 percent of hacked small and medium-sized businesses go out of business after six months. While the CIO deals with the technical aspects of a breach, it will fall to the CFO to answer to the regulating authorities, banks, customers, and suppliers. and take steps necessary to restore the business to firm financial footing, if possible. Security also plays into the very valuation of the business. A security breach can have impact on the valuation of a business, and security must also be considered regarding mergers and acquisitions. A CFO must be on guard against acquiring a company that brings with it a significant security risk.
Given these increased responsibilities for navigating digital transformation, in addition to a full load of strategic and day to day operations what is a CFO to do? Well, don’t go it alone.
Small and medium size businesses can work with a partner who has knowledge and experience – real experience in situations where what they know and what they have done can be applied to their enterprise.
48 percent of SMBs plan to transform their business for a digital future yet many don’t understand what digital transformation really is.
Strategic Financial Management of Technology
CFOs can develop a playbook. Identifying areas to be addressed on a regular basis using internal and external resources. The CFO and C suite peers will learn to assess technologies that have real value for that business. They will know the cost of these technologies, the impact to the current and future bottom line and the opportunity cost of the choices they support.
They will learn to focus on the management of technology and best practices in IT governance, and portfolio management. The C suite team will become aware of and sensitive to IT debt built by deferring investment to replace aging infrastructure or legacy applications. They will avoid building liabilities that reduce the business’s valuation, increase risk and hinder the flexibility needed for the future of the business.
Mastering the Customer Experience
They will also become technology users familiar with and benefiting from data analytics, business intelligence and process automation. They will invest time and effort to learn what their customer’s experience is and how to improve it.
Partnering with a network of expert resources the C suite will demystify the hype around IoT, Artificial Intelligence, Block Chain and Machine Learning and understand when and if these technologies might have true meaning for their customers and add value to their enterprise.
To increase their ability to manage technology the CFO and peers will get involved, learning how emerging technologies are being used in their industry or similar industries. Environmental scans will assess what is being done by traditional and non-traditional competition.
By exercising this playbook periodically and repeatedly, the C suite will monitor progress being made, refining and maturing emerging technologies. This will promote development of an organization with the people and resources that can take advantage when the time is ready.
What We Can Achieve Together
If you are looking for assistance on the journey to digital transformation, IT Ally™ can help. For starters check out our Diagnostic. To learn more about IT Ally’s C Suite IT Advisor services, please visit itallyllc.com or, schedule a 30-minute consultation with one of our key advisors.