CFOs' new relationship with tech explained - Deloitte's Arun Babu

The Enterprise Solutions head says CFOs are now important players in taking calculated technology risks.

Arun Babu heads up the Enterprise Solutions business for Deloitte Consulting. Under his leadership, the broad-capability technology and digital business team focuses on implementation services for large-scale technology and digital solutions across sub-Saharan Africa. 

It’s a role that brings Arun’s dual backgrounds in engineering and consulting together, focusing on transforming companies using a strategic approach to the digital transformation imperative. 

Deloitte’s Enterprise Solutions team focuses on large organisations and the role of technology-led business transformation. They are organised in line with how typical companies are structured, Arun says. 

“We have teams servicing the tech needs of chief marketing officers, chief operating officers, chief financial officers etc. We are geared to servicing the needs of the various CxOs in organisations. 

“A typical example,” he continues, “is an organisation that needs to become more customer-centric. We assist them with mapping that goal, finding appropriate digital tools (usually cloud-based) to enable what they are trying to achieve, like a consistent view of all their customers.

“In other cases, a business might require support around understanding large amounts of data, which is where our Deloitte Analytics teams would get involved, in managing huge volumes of data and making sense of it,” adds Arun. This could be customer data, used to determine what the next best offer or marketing campaign should be, or data used to predict and mitigate other business issues, he says. 

Predictably in the information age, data and analytics are becoming significant and critical levers for Deloitte. Another one is the role of robotics in automating core processes or minimising rudimentary and repetitive processes, so a company’s employees can focus on high-purpose tasks. 

Are we seeing local demand and uptake of these kinds of data, automation and robotics tools? Yes, says Arun, but in patterns that correspond to our own context.

“Unless you feel the pain of a disruption, you don’t take the transformation imperative seriously. That’s why manufacturing and mining took a lot more actively to the trend locally.”

With these industries in imminent danger of being disrupted, they reacted faster to automation and investment into automation activities. But, Arun cautions, it can’t just be a technology decision. Companies can and do make the mistake of adopting technology for its own sake, and not challenging the business model or considering broader factors including social context. 

For example, in South Africa, mines and manufacturing firms need to consider the other pressures of job creation and retention, enterprise development, and social responsibility. Companies that aggressively adopted large-scale mechanical automation here might see push-back from workers’ unions or government. 

Still, digital tools and transformation offer many benefits to an emerging economy like ours. “Consider the effect that something like telemedicine will have for people in rural or underserved areas. Education is the next one. Tech gives us a new way of delivering education. Technology offers solutions, but we mustn’t be ‘too developed world’ in our mindset towards these tools.” 

To sidestep that particular trap, Arun says, start with interrogating the problems themselves, and make technology the secondary conversation. 

“Once we know what our problems are, we can come up with unique solutions. Mobile money and mobile payments are a solution that started in Kenya, in response to a unique Kenyan problem. Prepaid mobile was invented in South Africa in response to a South African problem. Both of these have transformed the world," he says.

“This is why I want to create a unique African digital transformation capability at Deloitte, where we can help African organisations transform digitally in a very African way, instead of just following a UK or US model, for example.”

Digital transformation also necessitates a corresponding change in how we do business. CFOs, argues Arun, are in a unique position to not just oversee this transformation, but champion it like never before. 

“In the old days, technology was the remit of the CIO or CTO. With the digital age, that's changed. Firstly, large technology investments go through the CFO office naturally. Secondly, these days technology is embedded in every function.” 

Practically this means that in finance, the CFO makes many technology decisions, such as bringing in new tools or systems that offer better insights into finance decision-making. This, explains Arun, might be in pursuit of faster month-end closing capability, or it might be to support business planning capability. Technology is a core part of enabling this in large organisations. “It is a different level of conversations that we are experiencing with CFOs compared to five or 10 years ago.”

Another apparent shift in the CFO role is perhaps even more fundamental, and can involve rethinking the company’s entire way of doing business: The CFO is now an important player (alongside the CEO) in moving from a model that prioritises ‘failure prevention’ to one that is agile and able to take calculated risks; rethinking operating and capital expenditure as subscription and software-as-a-service (SaaS) models go mainstream; and finally, rejigging for customer centricity.

“The transformation inside a company to become customer centric can be quite complex and expensive. A CFO has the responsibility to help the organisation articulate the value this transformation can have, and decide how you fund this while still achieving the expected ROI from it.

“Part of becoming a more agile, experimental company involves asking how you create the funding mechanisms for it, how you reengineer business and income statements for a cloud-enabled world, and how finance can support this transformation by being an active participant and sponsor rather than just checks and balances.”