CFO Paul Stedall says that finance professionals today are looking for the financial benefits of tech spend.
When I started my career, we were living the golden years of the world’s first big IT boom. (Yes, I totally just gave away my age.) Practically every company under the sun was investing heavily in technology, with the promise that it would boost productivity to untold levels, driving economic growth like we’d never seen before.
Those were the days, I tell you. As we know today, with the benefit of hindsight, things didn’t always work out as planned. Part of the problem was the business model of the time. The “business” was mapped out by finance, sales and operations, and IT would then find ways to serve their operational needs.
Fast forward to 2021, and how things have changed. Today, technology sits at the heart of most modern businesses. As former GE CEO Jeff Immelt said back in 2014, if you went to bed last night as an industrial company, you're going to wake up today as a software and analytics company. It’s no different in my position: We often say we’re a technology and data company that happens to sell some insurance. We’re only half-joking when we say it.
As finance professionals, though, our relationship with technology is complex. On the one hand, we’re intrigued with the possibilities that technology offers to open up new possibilities and efficiencies for our companies, and free up our people to do the high-value tasks like generating insights and making the right decisions in support of the business strategy.
On the other hand, our eyes will always be on the bottom line. Gone are the days when IT spend was part of the cost of doing business. Today, we’re actively looking not only for promised benefits of our tech spend, but actual financial benefits. Don’t give me sweeping statements about increased productivity or greater analytics capabilities: tell me the ROI, in rands and cents, and then I’ll tell you if it’s worth it.
I’m always sceptical when people throw around one of the great buzz-phrases of our time, “digital transformation”. Everybody’s “in the midst of a digital transformation journey”. Or so they say. But when you ask them what that means, there’s less substance.
Make no mistake, I’m a passionate advocate for technology. In fact, in the insurance industry, it’s clear that companies that make targeted IT investments win in a truly volatile market. Changing customer expectations means customers demand low effort purchasing, personalised products and anytime, anywhere interaction with their insurer. And we’re seeing first-hand that technology allows insurers to take new opportunities, and to operate in ways that they previously could not.
In an excellent article, Will your insurance IT investments pay off?, McKinsey consultants write: “The rise of digital means technology is no longer a cost centre. Rather, it is an asset that, if managed well, can increase growth and profitability.”
In my team, we’re constantly looking for ways to use technology to automate certain aspects of our roles and make us better at our jobs. Do I want to replace my team with a tech solution? Absolutely not. But where there’s an opportunity through natural attrition to invest in a piece of tech that’s going to make everyone’s lives easier, and deliver a real financial payoff in the process, I’m there like a bear.
We’ve long moved beyond seeing IT as a tool that we use to do certain things in our businesses. It’s an asset that drives growth, performance and lasting business impact. The world of insurance – and technology – will never be the same again. And there’s no place that I would rather be.
