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The rise of disruptive technologies and what it means for future CFOs
Not a day goes by these days without an alarmist headline of some kind that warns of impending job displacements by automation. In the field of finance and accounting, in particular, the sense of doom is even more acute. Many believe that disruptive technologies will eventually end accounting and finance roles at the workplace, effectively phasing out human beings altogether. From entry level to the C-suite, no one is spared.
As a recruitment consultant in finance and accounting, I can confidently say that disruptions are not cataclysms. In fact, I see them as opportunities for the labour market to take their skills to the next level.
Thriving in a time of disruptions
Disruptions are not new. The first major example of this in the history books dates back to the 18th century with the invention of steam engines. When mechanised factories took over some of the largest industries at the time, workers bemoaned and protested the loss of their livelihoods.
Yet, looking back on the evidence, this was not the case. Technological advancements did not impact employment growth nor did it lower the average wage. In fact, two further industrial revolutions have taken place since then, and workers have always been able to level up over time to increase the value of their labour as ‘operators’ of such machines. This in turn created sustained growth in average income, as well as GDP in many capitalist nations we know today. With the rise of smart, disruptive technologies like the Internet of Things, virtual reality and artificial intelligence, fear of humans becoming obsolete will very likely turn into hearsay.
The difference, however, is that these newly invented technologies are no longer designed to replace low-skilled manual labour. Rather, they are taking over highly analytical, decision-making functions that are traditionally assigned to mid- to senior-level executives within an organisation. In the world of accounting and finances, we are speaking of roles as high up as the Chief Financial Officer (CFO). This presents both a threat and opportunity for the labour market today.
While it is true that technology has made it easier for businesses to create new jobs, the skills required to fulfil these functions have become more complicated. Employees, then, are forced to perform better than their digital, ever-improving, never-resting competitors — the machines.
A few years back, the demand for finance professionals were dominated by number crunchers: companies were generally looking for someone with strong accounting background and the ability to develop efficient cashflow management system for their organisations. However, in today’s context, while those traits remain relevant, the rise of Software as a Service (SaaS) platforms, such as SAP and Oracle, has automated accounting functions, limiting the need for human computers typically linked to such roles. This instance extends even to the role of a CFO. As operational functions can now be automated, the job of a CFO has evolved and expanded beyond its traditional functions.
Where do we go from here?
Last month, I had the honour of attending 'Managing Talent — Evolving Career Opportunities and Future Competences', a regional conference jointly organised by the Association of Chartered Certified Accountants, Institute of Indonesia Chartered Accountants, ASEAN Federation of Accountants. The topics discussed revolved around the future of finance and accounting functions, especially within the framework of a digitised economy. Throughout the event, we discussed the future roles of a CFO and how they can grow with, and not despite of, technology. We came up with the following conclusions.
1. Future CFOs are value drivers
As a leading figure in an organisation, future CFOs are less operational and more strategic. This means that they will no longer use historic data merely for accounting purposes, but rather as a tool to drive businesses forward. They must be able to make savvy business decisions, as they are the first to know when there is a rise or dip in revenue, as to whether or not a change in the business model needs to happen, and how the company should go about it.
As value drivers, future CFOs need to put forward their commercial mindset and allow their technical prowess to be somewhat secondary. Just like the factory workers of the past, technical acumen is slowly losing its appeal. As such, future CFOs must be willing to level up their skills to become operators of said modern technologies by delivering insights, not just processing raw data.
2. Future CFOs are business partners
As operators of modern technologies, future CFOs are the first to know what is going on in the company, especially from the financial standpoints. This gives them the capacity as advisors to CEOs regarding future corporate actions, business decisions, as well as matters related to internal affairs. In order to do so, future CFOs must hone their skills in interpreting data, being able to read market trends, as well as having cutting-edge ideas to improve the company’s performance.
Additionally, being a business partner also translates to opening the isolation of the finance and accounting functions across the organisation. In order to acquire market insights and utilise them, future CFOs must be able to collaborate with other key leaders in their organisations, to speak the same language as their counterparts, as well as to execute ideas as a team.
3. Future CFOs are not robots
A change in technology also means that an organisation needs to undergo a system or organisational change, whereby future CFOs may be required to take on the leadership role for such function. Hence, they must also exhibit a high level of interpersonal skills, from people to project management, in order to carry smooth transitions within their organisations. For this reason, I believe that the competitive advantage that future CFOs have against technology is their innate characters as human beings: empathy, leadership and adaptability.
Ultimately, the fact that we have been able to not only survive, but thrive despite the threat of job displacement from previous industrial revolutions, proves our adaptability towards the ever-changing uncertainties within our areas of expertise. As humans, we are fortunately blessed with the gifts of empathy, leadership and adaptability — traits that our creations are not able to mimic, at least not yet. The outlook of finance and accounting profession is not as bleak as initially predicted, but as Heraclitus said: “The only constant in life is change”. Therefore, we have no option but to keep innovating, creating new demands and to stay relevant in this corporate rat race that we love and cherish.