The CFO and the business of digital acceleration

December 2022 | TAGS: DIGITAL ACCELERATION, PLATFORM FIRST

This newsletter came together during the waning days of 2022. As we assess the current enterprise digitization landscape, it is clear the velocity of change will continue apace in the coming year.

Two very recent stories highlight what we all intuit: The decisions enterprises make today along their digital journeys could have serious future unintended consequences and knock-on effects.

The first is the introduction of Open A.I.’s ChatGPT and the buzz around its potential far-reaching impacts — both positive and negative. Some early reviewers are so impressed by the tool’s ability they are portending the next version, GPT 4 (rumored to be introduced mid-2023), will surely render Google search obsolete.

The second is the revelation that technical debt was at the heart of Southwest Airline’s inability to respond to and recover from the significant weather events that stymied holiday travel in the US. Whereas Southwest Airline’s major competitors were able to respond with alacrity within a few days to get passengers to their destinations, Southwest flight crews, passengers, and their luggage remained mired in chaos that stretched beyond a week – long after the offending storms had cleared.

In very different ways, both stories shine a spotlight on the reality that waves of transformative technologies demand enterprise senior leadership assess the right style of adaptation for their unique organization — without missing the boat and giving away competitive advantage.

At the heart of this assessment lies the expertise of the enterprise CFO.

In this issue we focus on the best of the breed: those who evaluate and justify technology spend while encouraging the necessary mindset shift from overly siloed to cross-functional to better deliver excellent business outcomes in the midst of constant change.

CFO Thinking: innovation value assessment beyond “gee whiz”

Microland’s conversations with global enterprises reveal that CFOs are increasingly partnering with CIOs and other functional leads to holistically evaluate evolved digital accelerators such as composable technology, digital AI Trust, Risk and Security Management (AI TRiSM), industry cloud platforms, and platform operations. The CFO voice at this table is unique: she sees how an entire enterprise stacks up end-to-end and has the data-driven insight to identify where digital capabilities can transform for the better.

And she holds the purse strings — which means she can encourage (or even mandate) cross-silo budget planning and collaboration around accountability. This is an act of change management that is critical to successful outcomes from investment in digital acceleration.

Within Microland we call this approach, “CFO Thinking” — having the curiosity and insight to ask game-changing questions about possibilities. It demands assuring organizational access to the right data at the right time to execute the best business decisions in as close to real time as possible. Success is ultimately evaluated through the lens of, “Is this investment delivering higher quality decision making and positive business outcomes at scale?”

Risk-managed digital acceleration of finance is a top CFO priority

As CFOs evaluate spend on digital acceleration initiatives throughout the enterprise, they also are stewarding their own team through disruption - with the goal of enabling off-cycle insights informed by upstream metrics (likely housed in non-financial data systems) while continuing to nail traditional cycle reporting.

The Digital CFO, a March 2022 report from PWC, highlights how high transformation ranks on the CFO agenda for their own team. CFOs invest 18.5% of their time on digitization projects focused on accelerating financial reporting. In fact, they cited digitization within finance to be more of a priority than digitization within their company. (5.98 mean versus 5.01 mean on a scale of 1 through 7.) The same survey revealed that improving decision making was the most cited motivator with reducing costs cited second.

These CFOs expect their Finance departments to be exceedingly disciplined in ensuring breakthrough outcomes from digital acceleration. Resource optimization through automation is prioritized over wildly pioneering innovation — particularly as risk management associated with AI remains a valid concern. And yet, enterprise CFOs are embracing AI and Machine Learning as a hedge to outperforming the competition. They manage anticipated risk by hiring and training skilled talent capable of stewarding an enterprise-wide data strategy grounded by data hygiene, integrity, and governance.

Heady times for the enterprise CFO

When the enterprise CFOs and their teams excel, the result is a verdant amount of actionable data and insight surfaced by a digitally accelerated network that is secure and reliable. Investment in technology is commensurate with business-impacting breakthroughs as better questions asked drive better business strategy. The enterprise enjoys high quality outcomes at scale today and the ability to flex with the velocity of change tomorrow.

We say kudos all around.

Lesson learned: Digital acceleration requires intentional integration of business and technology

Microlanders working side by side with our clients learn a lot about where these global executives are coming from specific to digital acceleration. While each enterprise has unique strategies, objectives, and apprehensions what is common to all is the increasing time spent making decisions that place technology (digital tools, analytics, and automation) at the heart of the hundreds of thousands of moving parts that comprise a day in the life of the global enterprise.

Those moving parts must perform reliably and securely. Without an iota of doubt.

For the C-Suite, however, success is increasingly measured by the ability to scale excellence in business outcomes through ongoing improvement in efficiency, insight, employee and customer experiences, competitive stance, and business value generated.

Peter Bendor-Samuel, Founder and CEO of Everest Group, spoke recently on LinkedIn Live about the need to “Support IT leaders and functional leads in true collaboration – meaning shared objectives and key results, joint budgeting process and funding allocations, integrated teams and initiatives, etc.” He also recommends “Evolving the enterprise to be tightly woven into the tech stack.”

At Microland, we refer to the virtuous cycle of intentional integration of business and technology begetting agility which in turn promotes even tighter integration. To us, this is how you ensure competitive advantage and outsized return on investment in digital acceleration.

A Microlander motivated to address climate change

Arjun Ravindran, Associate Director

The environment is very close to my heart. The pace at which change is happening is alarming. To tackle it I feel we need to fundamentally change how we live. When addressing the U.N. Climate Change Summit in 2014 – nearly 10 years ago – President Barack Obama quoted an American governor who had observed, “We are the first generation to feel the impact of climate change and the last generation that can do something about it.”

To me, this sums up the reality. Also, we have a son now - born three years ago. That certainly focuses the mind and instills urgency.

I’m inspired by those who apply their talent to innovate in areas that could drive multiple positive outcomes. There’s a lot of smart work being done around long-term energy storage and other critical innovations such as clean energy to power airplanes.

David Attenborough is a go to resource for inspiration. As is the Cipher Newsletter published by Breakthrough Energy, the firm founded by Bill Gates with the charter to inspire the world to develop and scale the critical solutions needed to reach net-zero emissions-so everyone can enjoy affordable, abundant clean energy.

I try to bring this thinking to my work at Microland. We have a SaaS solution called Smart Spaces which I am quite involved with. Using environmental monitoring, activity sensors, and a sustainability dashboard built on Azure, Smart Spaces provides intelligence to support data-driven decision making about office space and other building capacity, energy use, air and water quality, as well as the deployment of personnel for certain maintenance and cleaning tasks – all to promote efficiency and lower an organization’s carbon footprint.

This pragmatic focus on scaling innovation to address – solve – the climate crisis is very compelling to me. Here in India, I see firsthand the shifts in consumption traits generation over generation. My parents’ generation is the saver generation – very attuned to modest consumption. My generation is less so. And those five or 10 years younger than I are becoming adults when growth is incredible: their disposable income and consumption habits are dramatically higher than that of earlier generations.

It’s a very instant kind of a generation. Today, you can get a chauffeur, or a cleaning service at your home instantly. Groceries get delivered to your door in eight minutes!

This immediate consumption is addictive and therefore hard to reduce. That’s why we need to address the climate issue on a broader scale. I try to mentor those younger than me about taking public transportation, being conscious about consumption, to think twice before just ordering some gadget. I really try to engage with them around this. I won’t stop trying because we truly are the last generation to be able to do something about climate change. We each need to do our part, but we also need a few truly huge innovation wins to see us through.

A bit of news

We’re thrilled to announce that this past October Microland was named a Global Professional and Managed Service Partner of ServiceNow.

Through our hyper-automated Service Management Platform, SmartCenter 2.0 powered by ServiceNow, we help global enterprises optimize their IT and Business processes to drive process efficiency and visibility, improve employee productivity and user experience, and reduce their IT operations costs.

The unique SmartCenter 2.0 capabilities are derived from established Microland IPs, including Intelligeni, Microbots, and SmartInsights.

Visit our website to learn more about SmartCenter 2.0 and our partnership with ServiceNow.