Five tech trends CFOs cannot ignore - a chat with KPMG's Frank Rizzo
“I have always had a passion for technology,” says Frank Rizzo, who is in charge of the technology sector and of data & analytics at KPMG across Africa. Frank is a popular speaker at CFO South Africa events, combining ultra-current insights with an easy presentation style. In an exclusive interview with CFO South Africa, Frank speaks about his love for technology, the way CFOs should use data, and his plans to increasingly work with incubators and startups. Frank also lists five technology trends CFOs cannot afford to ignore.
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“In my school days I was already messing around with computers,” says Frank, when asked how he ended up as an IT expert. “When the internet just started, I was one of the few people in my environment who saw the possibilities,” explains Frank, who was careful to first qualify as a chartered accountant, before specialising.
At some stage, Frank’s career took off so spectacularly that he was put in charge of technology for KPMG throughout Europe, the Middle East and Africa, something he understandably lists as one of his proudest career achievements to date. “At various forums, I was the one who spoke on behalf of KPMG across the world to give our views on technology.” It was only when the travelling became too much that Frank started to focus on the local market – and added the responsibility for data & analytics (D&A) to his portfolio.
Frank names ‘two big initiatives’ as his main focus for 2016:
- “First of all, I want to make data & analytics mainstream across KPMG. The D&A team already plays a very active role in audit, tax and also in advisory, but I want us to be everywhere in the firm.”
- “Secondly, we have started working with incubators and startups, an approach we have borrowed from the UK. The next giants will be future clients if we build relationships with them now. Often startups have great ideas, but no business insights. We are part of a technology hub in Braamfontein with Wits University. It is a place to meet, work, share notes – we will have a desk there where people can come with questions and request assistance around registering a business, tax and other practical issues. There is already proof that this approach works, with a client from an incubator in Durban, Adapt IT, now listed. We started working with them when their business was just starting out and now we have a listed client.”
So what technology trends should CFOs be aware of? Frank immediately points to the Technology Trend Index, a real-time trend-watching tool KPMG is running with the Dutch startup, Owlin. The index looks at newsfeeds and social media to see what is being talked about, but also what is really being done and implemented. “It is about the talk, but also about where the talk is being walked. It would be great if we could set up an index like this for Africa in the future.”
Based on the European statistics, Frank identifies five major tech trends that South African CFOs cannot ignore:
- “At the top of the trends list is cloud computing. That is now in the walk-the-talk phase, whereas it was mostly just talk two to three years ago. Cloud is now part of the strategy of most firms. If you are a CFO and you are not using the cloud, you should ask yourself why not. All technology-intensive businesses have implemented the cloud to a lesser or greater degree by now.”
- “Big data. There was a lot of hype around this in 2015 and now we are starting to see it being implemented. I don’t like the term big data and rather talk about data & analytics. As an example, my team at KPMG is working with an insurance firm that is using predictive analytics to reduce fraudulent claims. People have now cut through the hype and look at ways data and analytics can be used in their specific business, without trying to do what Google or Apple are doing with data. For most companies D&A means focussing on proper use of your own data, rather than using social media and other external sources.”
- “The Internet of things is still early in the hype cycle. At the same time, you see it everywhere you look, especially in terms of wearable computing and fleet trackers – the trend is mostly consumer-driven. In the near future we’ll be seeing more technology to detect if something is going wrong in a production process, real-time monitoring, available in the cloud. That means CFOs anywhere in the world can follow their production lines and keep a finger on the pulse. My fear is that businesses put sensors out but don’t know what to do with what they monitor. That is why the D&A part of the internet of things is essential. An obvious example of a great application is what Discovery is doing, where people can earn an Apple watch if you wear it, use it and stay active enough. It is keeping the members active and healthy, leading to less claims.”
- “Cybersecurity. Criminals have gotten more active in 2015 and technology and cybercrime are no longer in the court of the IT department, but are discussed at board level. What are our weak points? What will people want to steal? When insurance companies jump into the gap, you know the threat is real.”
- “Digital payments. At first glance this is only relevant for consumer-facing businesses and financial services, but this is how people and companies are all going to trade. Things like digital currencies such as Bitcoin and other ways to bypass the banking system are on the rise and CFOs need to be aware of that and follow the trends closely. Other trends, which are mostly just talked about until now, are autonomous vehicles, 3D printing and robotics.”
“Executives need to filter what is relevant. When describing the properties of data & analytics, experts talk about the three Vs: volume, velocity and variety. From the beginning, KPMG has added two other Vs to that: value and veracity. There is also a lot of rubbish data around and you cannot rely just on Twitter feeds. You need to be asking the right questions and be able to test the data. We are starting to see firms who hire that mythical data scientist. You need people who have the technological background, understand the data cycles, but also understand the business. That is still quite difficult to find.”
Furthermore, says Frank, finance departments need to transform to deal with the changes. “The CFO needs access to different skills. Younger people who have grown up with a different mindset can gather information from many different sources and analyse data on the fly.” Good external advice is also crucial, with KPMG offering a package that not many can. “Our biggest asset is our multidisciplinary approach,” says Frank. “For a number of clients, we have been able to use data & analytics to look at their tax and find savings, for example. Obviously we offer our clients all the insights with the latest expertise, but tapping into the skills from our different departments is what sets us apart from other big firms.”