Technology is advancing at a quicker rate than at any other time in history. Since the Industrial Revolution, innovation has sparked a rapid pattern of inventions and updates, leaving the rest of the population scrambling to catch up. In the past five years, we’ve seen our economy hinge on cryptocurrencies, virtual work environments, cybersecurity, and the rise of AI.
What can a CFO learn from the last five years of tech advancements? How can CFOs use this knowledge to protect their organizations by staying on-trend with the latest technology and using it to their advantage?
DIGITAL CURRENCIES AND ASSETS – KNOW A BIT ABOUT BITCOIN
Today, everyone wishes they could time-travel to 2010 to invest in Bitcoin, but only a few saw its potential back then. Bitcoin and other digital currencies have trended up and down through the pandemic and made a name for the blockchain, sparking infamous ‘meme’ coins and the NFT movement.
The digital asset ecosystem offers businesses, asset managers, and investors a new realm of opportunity. CFOs need to understand how digital currency utilization may benefit the business while accounting for its impact on company financials, tax structuring, and overall business strategy. While knowing a bit about Bitcoin is helpful, CFOs should also rely on a reputable business advisor and accountant to ensure they’re managing risk appropriately, maximizing their company’s tax benefits, and delivering accurate financial reporting as it relates to their company’s digital asset strategy.
REMOTE AND HYBRID WORKPLACES – THE NEW VIRTUAL REALITY
If you weren’t remote before 2020, you certainly are now, or at least functioning in some sort of hybrid work model. As businesses and their employees experience the benefits of working from home, the hybrid work environment has become a standard model for many companies. So, how can your organization scale the virtual wall when daily face-to-face interaction isn’t the current reality? And, how can a CFO ensure that employee tech remains secure and reliable?
Many think that one heavy initial investment in technology for employees is all that it takes to implement a hybrid or remote workplace. But making that mistake could result in major business disruption when hardware outlasts software, hardware doesn’t last at all, or systems become compromised by cyberattacks.
CFOs require accurate and up-to-date financial information to carry out daily tasks and make business decisions. Without the right technology and security, generating financial insights and feedback from your team becomes nonexistent. Ensuring that your business has the proper resources for hybrid work – people and technology – might seem like a big expense. However, it is the modern infrastructure that your organization can’t function without and is the key to keeping everyone productive and connected.
CYBER AND INFORMATION SECURITY – AN EVOLVING BUSINESS IMPERATIVE
Cybersecurity is at the backbone of any digital transformation and technology infrastructure. While cybersecurity took off in the 1970s, and security hacks are by no means a new fad, cyberattacks continue to increase in size and scale across all industries.
CFOs need to be aware of the risks presented with a hybrid work environment, and how to fortify their organization as the average cost of a data breach in the U.S. is $9.48 million dollars. This type of financial fallout can be devastating to an organization and wreak havoc on a company’s reputation. Companies need to ensure they’re equipped with proper information technology and security solutions, documented cyber risk assessments, and cyber insurance to help mitigate the effects of a cyberattack.
The CFO should be responsible for checking on cybersecurity protocols with their CIO, CISO, or vCISO on a regular cadence. Weekly meetings afford leadership the best insight on up-to-date threats, vulnerabilities, safeguards, and the overall posture of the organization’s data security health. Especially in a hybrid, digital world, it is vital to be aware of all possible points of vulnerability. Believe it or not, people remain the number one vulnerability in all companies, not technology. To maintain the overall financial health of the business, it’s imperative that every employee receives education on phishing and other forms of cyber-attacks on an ongoing basis to help secure the integrity and longevity of the company.
ARTIFICIAL INTELLIGENCE – THE RISE OF AI
Artificial Intelligence – it’s the world’s hottest tech trend. AI has everything: the ability to write content, answer customer queries, perform research, and serve as a personalized problem solver. While some AI tools have been around for a decade or more, the launch of ChatGPT less than a year ago brought greater attention to the advancement and far-reaching capabilities of AI. AI tools will enhance the capabilities of professionals across the business, making them more valuable to organizations.
AI can be just as valuable for CFOs. Robotic Process Automation (RPA) and Intelligent Process Automation (IPA) can learn and improve processes over time to drastically cut down on manual processes and create more efficiencies for finance and accounting teams. Imagine taking a manual task, implementing an automated action behind it, and seeing improved accuracy in your company’s financial analysis or budget forecasts. By modernizing the company’s work environment and implementing the right AI tools, CFOs will benefit by increasing operational efficiency, strengthening compliance, growing company margins, and effectively utilizing their team members.
CONCLUSION
When looking at how technology can benefit your business, the CFO should be a key player in the discussions and execution. Yesterday’s technology innovations are driving the most successful businesses. Why? Because companies were intentional about how to implement new technology into the business and involved the CFO.
With advances on the horizon like self-driving cars and the evolution of AI, plus a volatile economy, there’s no doubt we’ll see more disruptive innovations and scalable change along the way. We’ll also see the role of the CFO become more valuable as companies continue to adopt new technology. However, it’s important that businesses surround themselves with trusted advisors to support CFOs in their journey to set their companies up for success.
If you’re looking to add more value to your business, Withum can help. We are successful at finding the perfect balance of people and technology to help businesses thrive.
Chris Passmore is partner-in-charge at Withum’s Encino office. He can be reached via [email protected].
Learn more at Withum.com.
