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A lot can happen in 10 years: The Impact of Technology on the Future of Corporate Finance

A lot can happen in ten years. Heads of state often will have changed in democratically governed countries, global economies can rise and fall, and technological innovation, large and small, can permanently change our daily lives.

For example, Apple introduced the first iPad in January 2010 to more than a little public skepticism. “Do we really need it?” they asked. Over 350 million iPads have since been sold.

A now commonplace photo app called Instagram was launched in October 2010. Today Instagram has over 1 billion monthly users and “has become one of the most popular social media platforms for teens and young adults.”  Less than 2 years after its launch, Facebook purchased Instagram for $1 billion cash.

While currently at the dawn of the proliferation of 5G wireless technology, we were debating in 2011 if and when the switch from 3G wireless to 4G would be worth it. The expansion of 4G allowed for the growth of data-centric mobile applications like Uber by increasing download speeds up to ten times faster. 5G will again increase data speeds by a multiple of up to 15 times over 4G. The United States will have to wait longer than other countries for the infrastructure to mature.

These are technologies that, in one way or another, have changed how we live and work. As a financial leader, I am challenged daily to identify emerging trends and technologies that would improve how we do our work, the impact that we have, and to prepare operational and other financial professionals for the changes ahead.

There are three emerging technologies, which will change corporate finance’s role: On-demand Business Intelligence (BI); Cloud-based Enterprise Resource Planning (ERP); and Collaborative Blockchain. While it may take several years to fully realize these technologies’ impact, I do not expect that we have longer than a 3-year horizon to adapt and lead through this change.

On-demand BI will enable decision-ready data that keeps pace with the ever-increasing speed of business. Much of this reporting will be self-service and will allow for the generation of simulated virtual accounting closes that leverage “in memory” processing, shorten financial cycles to occur in real-time, and leverage advanced analytics and visualization tools to aid decision making.

 Cloud-based ERP that is underpinned by robotics and cognitive processing, including machine learning (ML) and artificial intelligence (AI), will be embedded throughout the ERP environment as opposed to mostly as add-ons. This will allow for a more data-centric approach to management decisions, transforming unstructured data into consumable information, and shifting analytics from reflective to predictive, allowing for self-correcting entries and preemptive actions.

Blockchain will enable greater transparency and collaboration throughout your supply chain, unlocking growth opportunities outside of traditional investments. Using tools like distributed ledgers between entities will reduce transactional lag time and increase the speed that data can be used to make management decisions within the organization and throughout the supplier ecosystem.

The introduction of these technologies will enable and, in some cases, require a different way of working and skillsets for financial professionals. According to Deloitte, financial leaders’ role will expand beyond traditional functions as traditional tasks are increasingly performed by technology. Successful finance leaders in 2021 will actively shift to business effectiveness partners who partner with other areas to create and execute an optimal corporate strategy.

Corporate finance organizations will also change, as the employee’s location and the time zone from which they work will continue to matter less in an on-demand data environment, leading to a more global and distributed workforce. Who and how companies recruit for new talent will need to change to meet these needs, recognizing the fierce war to acquire, retain, and develop talent as a top priority and key to business success. Becoming an early champion of greater workplace flexibility could help to set an organization apart from competitors.

How funding is allocated within an organization will also evolve. Yesterday’s large-scale, multi-year, and capital-intensive technology builds will continue to become fewer and smaller, giving way to license and subscription-based cloud technology products and solutions. This will require a change in how companies fund technology and the governance structures to monitor projects and programs. The resulting impact to the current make-up of corporate balance sheets will require investor relations teams to proactively engage analysts and institutional investors throughout the evolution from large capital allocations and big-ticket, depreciable technology assets to higher operational expenses.

The sooner that financial professionals understand these technological changes, identify trusted solution providers with whom to partner, and begin the work to change their organizations’ skills and mindsets, the more prepared they will be for the innovational impact of the new roaring 20s.

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