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New Corporate Finance Technologies Webinar - Changing the Role of Finance

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New Corporate Finance Technologies WebinarWith the significant changes in business, technology and the economy, the role of Finance leaders in planning, decision making, and driving technology adoption at their companies has never been more crucial. New technologies such as cloud, mobile, social, big data and analytics are creating new challenges and opportunities in areas under the responsibility of the CFO. How do Finance leaders understand and effectively satisfy the technology needs of those at their companies who drive company efficiencies and top line growth? What are the implications of these technologies for companies today, and how is the CFO's role evolving to address them?

This New Corporate Finance Technologies Webinar video is from the Proformative webinar "How New Technologies are Changing the Role of Finance" held on November 6, 2012. The webinar featured a presentation from Bruce Bendix, Baker Tilly.

 

New Corporate Finance Technologies Webinar

 

"Today, what I'd like to cover is a few things. First of all, I'd like to set the context for a discussion with our perspective on the characteristics of the successful enterprise of the future, which we call "the dynamic enterprise". Then I'd like to provide our perspective on two big technology mega-trends. Which are really impacting all businesses, and then how those impact the role of the CFO. Those two big technology mega-trends are Cloud social and mobile, and then analytics and big data. Finally I'd like to talk about how all this impacts the role of finance leadership.

Sorry, we went ahead one slide too many. If we look at the four forces impacting organizations. We see just a lot, a lot of change. Let me start on the upper left-hand side, which is the macroeconomic forces. Since the global economic crisis, we see the economic landscape being permanently altered. Many economist do not see robust economic growth coming for some time. Yes, there are some thoughts after the election, we might get some bump.

If you think about the fundamentals, the Federal Reserve has run out of options. In the U.S., we are facing a fiscal cliff at the end of 2012. We're also more connected to the worldwide economy, so the economic issues of Europe and the slowdown in China impacts us. All this is somewhat unusual, because normally we've had slowdowns where we could count on a recovery in a relatively short term. In this case, we see that companies need to change their strategies to adjust to a new normal of slower growth, and also prepare for the possibility of future shocks.

If we move to the right, the other dynamic we see is a changing competitive landscape. Of course global competition is old news, but what we're seeing now is companies moving into new industries, and redefining them and in doing that, destroying the incumbents. Look at what the disruptive strategies by Apple, Google, Netflix, and Amazon have done to companies like BlackBerry, and Microsoft, and Blockbuster, and Boarders. First we were seeing this in just digitally-based industries, but now we're starting to see this happening everywhere.

A third trend on the lower right is the changing of the workforce. Now we have several generations within the same workforce and a significant diversity in terms of values, motivations, and comfort with technology. Baby boomer executives see the world very differently from the millennials and companies need to adapt to this change. Furthermore, the need for talent is growing, and the supply and demand balance is shifting in favor of talent. I'll talk a little bit more about talent with regards to these changes and the role of the CFO in the finance organization a little bit later in our talk today.

Today we're going to spend our time on the fourth trend, which is technology. In technology, we're seeing very big trends and changes, which is going to effect the world of CFO. When we think about how companies respond to these changes, they have a choice. They can fight or embrace these changes. We see companies in all four of these quadrants.

On the upper left-hand side, with the fight change active, we see a lot of companies that choose to fight change through protection and regulation. These are companies and industries that have a lot to lose against the changes that we've talked about and they seek to build essentially walls and motes with the assistance of government and big time lawyers to protect them.

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Think of the entertainment or music industry, financial services, healthcare, but we're also seeing it in some small industries. I just heard something the other day about the taxi industry was fighting some of the innovation that's now enabled through smartphones, and actually kind of part-time unlicensed drivers to provide point-to-point transportation solutions. They're fighting that through regulation so that those solutions don't get a hold.

We see these kinds of strategies working in the short term, but in the strategy, it's not going to be sustainable because the gulf between the external and the internal worlds will only get greater. There are other companies on the lower left that just kind of pretend that change will go away. It's denial, and it's a common human condition. It's rooted in our brain chemistry.

When ideas get challenged, or they don't represent what's familiar to us, we feel a cognitive strain, and consequently are more likely to believe that information to be bad or false. That's been proven by psychologists. It's not exclusive only to the executive suite, but it lives very comfortably there. Maybe the high compensation of executives is to blame. Upton Sinclair once wrote, "It's difficult to get a man to understand something when his salary depends on him not understanding it," and I think we see some of that behavior every once in a while.

The third group of companies on the lower right, they see change coming, but they simply hope that they can adapt without really addressing what they need to change. They say, "Well, challenging times have come, and because we've survived, I guess we were good at it," but their limited experience makes them overconfident, not a good strategy in itself.

Finally, and what we advise companies to become is a dynamic enterprise, where they see the change and they adapt to it. As Jack Welch said, "Accept the reality as it is, and not as you want it to be." More importantly, they respond to those changes, and the response to those changes are dynamic enterprise point of view. For those of you who are interested in that, please get back to me and I can provide you a whitepaper that talks further about the dynamic enterprise.

Today, we're going to talk about the rapid new technology and the changes that are happening there. I'm going to start with kind of the discussion of convergence. All these technologies are converging in the Cloud, and the way I see it is that this is essentially the kind of electrification moment of the IT industry.

What do I mean by that? Well, if you think a century ago, we had a major technology shift going from steam power to electric power. If you think about the huge changes that occurred because of that change, we went from a situation where factories were built with huge pulley systems, such that power was conveyed from a central point to these co-located machines. Now with the electric power, we had the ability to motorize each machine, making them more decentralized.

This changed processes, enabled new products, and new industries. In a similar way, we see that this technological convergence in the Cloud is going to have implications that we don't even know yet, but we know they're coming. We'll talk about some of those, but just think even about what's going to happen with the role of the office. The role of coming to a central location to work is going to dramatically change, because of this. The other thing we see, which I think is similar to the electrification point in time..."

End partial: New Corporate Finance Technologies Webinar

 

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