Recently, more than 2,500 leaders from business, government, academia, media and the arts descended upon Davos-Klosters in Switzerland for the annual meeting of the World Economic Forum (WEF). The theme for this year’s event was ‘Mastering the Fourth Industrial Revolution’, or in laymen’s terms how we will manage the blurring of lines between man and machine.
Each previous Industrial Revolution—marked by the advent of mechanical production equipment, the invention of electricity, and the rise of the computer—represented a huge step in human advancement. The Fourth Industrial Revolution marks the next stage in this progression and leading companies have already begun to adapt their business approach for the digital age.
Businesses today are increasingly reliant on data: data on their daily activities, data on their costs, data on their workforce, and of course data on their customers. Being able to effectively mine, analyze and tie this information together has become crucial for finance teams, who today are relied upon to uncover valuable data-driven insights that help shape the business’ future strategies.
The beginning of the Fourth Industrial Age has seen the finance department move out from under the cover of the back office and into the heart of the modern business. Modern companies need a real-time view of all their assets—physical, human, and financial—in order to understand how well prepared they are to react to new developments in their market and pinpoint where they can become more agile in the face of growing competition.
In today’s world of instant feedback, information that isn’t delivered in real time is largely deemed too slow. The swift uptake of cloud technology by finance departments in the past year has helped many businesses simplify and speed up complex back office processes like planning, budgeting, and forecasting to keep up.
While big data analysis can certainly help companies identify new opportunities, it can’t gauge how well equipped they are to capitalize on that opportunity or determine how best to manage their assets to do so. With the in-depth overview they have over the business’ people and processes, modern finance teams are ideally placed to achieve the latter and help make the company more nimble.
One of the major topics of discussion at WEF was the rise of new technologies and the threat this poses to our jobs. It’s estimated that 7 million jobs will be at risk due to the adoption of new automation technologies. It’s a fair point; if these systems can provide a quicker, more accurate snapshot of business performance, where does this leave human employees?
The Fourth Industrial Revolution will certainly see businesses reassess their operations and strategies, and rely on a faster, more in-depth analysis of their back office data to successfully pursue new opportunities. But while many WEF attendees have expressed concerns about what this means for jobs in the future, I expect we’ll see the next few years reveal just how much value finance professionals can add to businesses in the digital age.
Strategic business decisions are ultimately made by human beings. Data no doubt delivers an increasingly accurate and comprehensive view of all the parameters that inform these choices, but it will take finance professionals with much wider set of expertise to make sense of this wealth of information.
In other words, unless people ask the right questions of their data to begin with much of its value will be lost. Managerial abilities like strategic thinking, leadership and a strong understanding of how each department of the business feeds into the others will therefore prove extremely valuable, and catapult finance leaders into the strategic heart of the organization.
When it comes to the finance department, the blurring of lines between man and machine isn’t about robots taking over. It’s about being able to seamlessly integrate a growing treasure trove of valuable information into the day-to-day operations of the company so it can enhance the way it does business.
For advice on how to ask the right questions of your data, download the CGMA research, "The Digital Finance Imperative: Measure and Manage What Matters Next."