CFOs SHOULD be involved in tech, says Standard Bank's Sean Berrington
Standard Bank's CFO of Group Tech says that CFOs "sticking to their knitting", could result in the next large corporate failure.
Gone are the bookkeepers of yesteryear who just sat behind a desk on the ninth floor and produced the numbers. Today’s CFOs are actively involved in (and sometimes leading) strategy, client engagements, business resilience initiatives, optimisation of resource utilisation decisions and investor discussions and, in fact, often ensure the ship “continues to sail north”.
With this in mind, I cannot help but challenge, and perhaps feel even ever so slightly offended, that there is a view that “CFOs shouldn’t be involved in tech”.
In fact, I would go so far as to say that the CFO, if anything, is ideally placed to help ensure the investment in tech is appropriate and balanced with other key organisational priorities. Here is some food for thought:
Over the years I have had numerous engagements with the more astute CTOs (or CIOs) in which they have been able to “pull a fast one” and get unnecessary expenditure approved purely due to the ignorance of the leadership team, often on the premise that “the sky is falling”. In fact, I have found that the sky has never fallen and, perhaps, the right investment decisions were ultimately made, negating the need for the investment to start off with.
With IT spend continuing to consume bigger and bigger portions of the total annual budget, is it not negligent of the CFO if he doesn’t fully understand where the IT investment is going and what the expected return is? Think about some instances of large corporate failures where the CFO didn’t know what was going on. Perhaps a limited understanding of tech is cause for one of the next big corporate failures.
Finally, the finance function has an opportunity to set the tone of the organisation. With the onslaught of artificial intelligence, robotics and intelligent automation, is there not an opportunity for the finance team to pave the path for broader organisational transformation? These are opportunities that, with little investment, can yield massive returns.
While I completely acknowledge the strategic importance of IT (or tech) in any organisation’s strategy and can see the opportunity for a well-placed CIO or CTO being represented on an organisation board (or other senior forums), I can’t help but feel the lack of CFO interest, knowledge and involvement in understanding and influencing the IT strategy and investment could be grounds for one of the next large corporate failures.