The CFO must be a leading voice, says Sihlalo Jordan, Deloitte's deputy CE
“Every CFO is now a strategic partner to the organisation and has to be,” says Mgcinisihlalo Jordan, partner and deputy Chief Executive for Deloitte Africa. Better known as Sihlalo, the former leader of the firm’s financial services practice in Africa has an astute understanding of what should be expected of modern finance leaders. CFOs should champion the rise of disruptive technologies within their organisations, he said during an exclusive interview with CFO South Africa, where he also spoke about finance leaders’ responsibility to promote an aligned strategy, future-focussed technology and shining integrity.
- Sihlalo is one of the speakers at the last CFO Summit of the year on 16 November, along with leading economist Goolam Ballim (Standard Bank) and ZAR X CEO Etienne Nel. More info + registration here.
Several things have happened over the last few years, that have thrusted CFOs into a position at the forefront of change, notes Sihlalo, a chartered accountant who was admitted as a partner at Deloitte in 2007 and also holds a banking law diploma.
"Firstly, disruptive technologies can no longer be ignored, and I think that the CFO is at the forefront of that development. He or she should be championing the rise of disruptive technologies and how they are embraced within the organisation. Secondly, global geopolitical developments have made the need for faster and better decision-making more prevalent than it has ever been, and have resulted in the CFO function being intricately linked to the business of the organisation."
CFOs can no longer be satisfied with sitting back and reporting at the end of the month or the end of the financial reporting period, says Sihlalo. "Business leaders of divisions and CEOs now want real-time information regarding product development and product performance. You cannot have a CFO that is not strategically aligned. You need to be able to provide that information so that decisions can be made very quickly."
Deloitte runs several CFO programmes and surveys, including the highly respected CFO transition labs. The firm also has a programme that is called 'next-generation CFOs' for a select group of young but developing individuals who are earmarked to become group CFOs at some point in their careers. During any of these programmes, technology and its opportunities is pivotal, explains Sihlalo, who served on the Deloitte global advisory council in 2010-2011.
"Disruptive technology is a fascinating topic and, depending on who you speak to, it's either an issue or a non-issue," says Sihlalo.
"There are some people who believe that this is a fad and that things like artificial intelligence are only going to become a practical reality at some point in the very distant future after they have retired. Their argument is that it's a slow-burning fuse and that some of these technologies, while great in concept, have no practical applicability for the CFO role today."
Winners and losers
Sihalo has pinprick-precise views on the topics himself. "My own school of thought is that the big bang has happened already and we're slowly going to start seeing some organisations emerging as winners and others as losers. I see the whole concept of disruptive technologies in two buckets: there are those who are only there to improve your core and there are those who are there to transform your organisation."
No longer can a CFO operate without considering what cloud technologies and web-based applications can do for their organisation, Sihlalo continues. "Being able to provide real-time information at the fingertips of the organisation, whether it's the CEO, the rest of the executive or even the board, is crucial. Analytics have to form part of any insight-driven organisation. This should be able to provide the right information at the right time to maximise the efficacy of decision-making." According to Sihlalo, cloud, real-time information and analytics very much belong to the core of what businesses should focus on.
"The CFO has to be a leading voice in terms of how those technologies are incorporated now; not for the purposes of growing the organisation to any great length but just to keep up with you need to be doing on a daily basis."
Besides the core there is a group of what Sihlalo calls disruptive technologies, which can really transform business models. "Examples of that would be blockchain and artificial intelligence. CFOs should be thinking about machine learning, not only in terms of how it can improve the effectiveness of their current financial operations but also in so far as the extent to which they can transform them altogether."
CFOs must realise that AI is going to change the speed and cadence of their processes completely, says Sihlalo, though this is just the tip of the iceberg. "AI will also create new processes and can give rise to new products or business models that are completely different to what the company has been doing in the past."
By Sungula Nkabinde
This article first appeared in CFO Magazine.