We are, by all accounts, in the middle of a digital revolution and not only is it changing the way we interact and do business, but it is also shaping how a finance function operates.
This is the second of three blogs. The first assessed some of the predictions that are being made about the future role of finance, highlighting amongst other things the role of technology in automating tasks and processing and analysing data.
This next blog discusses the importance of improving your digital IQ, a term used by PWC for corporates but something that I believe should also be applied to individuals. Your digital IQ (your knowledge of technology and its impacts) is in effect a ‘gateway’ or an ‘enabler’ to the future role of any commercial finance/ FP&A individual.
The last blog focuses on the soft skills needed to complement both your accounting skills and digital IQ, together with who in the organisation is best placed to share their top tips.
Defining the scope of your digital IQ
Your digital IQ will mean different things to different people. There is no set list and whatever your list, it’s likely to be out of date in a couple of years' time.
The key benefit in considering your digital IQ is to create a distinct topic to focus on and to evaluate yourself against it. It would, in effect be part of your continuous development plan, as discrete as keeping up with ‘accountancy standards’, keeping up with the latest ‘budgeting techniques’ or ‘improving presentation skills’.
Some examples of what could be in your digital IQ list
Below are some examples of what could be in your list of digital topics. The list is illustrative, in no particular order and not exhaustive.
1. The cloud
The move off mainframes to the cloud continues. As part of finance you are likely to be impacted as a customer – and therefore need to be aware of the permutations, pros and cons of such a move.
You may also be required to evaluate a move to the cloud as part of your budget or 3-year plan – and clearly having some baseline knowledge of the benefits and risks will get you off to a good start.
2, Implementing new software
Companies are littered with the skeletons of failed software implementations. New technology is providing a host of great software capabilities but before embarking on acquiring a new capability or improving a process, be sure to have a realistic view of your ability to implement.
Is there enough bandwidth to implement? Are the right skills available? Is the input data clean? Does the process need to be fixed?
3. Software: New planning, forecasting and analytical capabilities
With the above caveat in mind, I think it is worth scanning the horizon for the latest software products on the market.
Whether this is in the form of back-office automation tools, add-ons for planning tools or the latest in analytical capabilities, the point is to have a sense of what is out there and to go beyond the hype.
4. Cybersecurity / systems resilience
You may not be responsible for cybersecurity or the resilience of your systems but given the recent public IT meltdowns, it pays to have a basic understanding of your company’s situation. E.g. what is your plan B if you can’t deliver your latest forecast or business case via the core finance system?
5. Data privacy
Most readers will have had some form of training in this via the recent GDPR legislation. If you haven’t, I suggest you make a start.
From a commercial finance/ FP&A perspective you may well be manipulating customer data, even inadvertently – so it’s critical to understand what you can and can’t do with the data at your disposal.
6. Big (?) data
I’m not too sure how real this is for some finance people right now. However, I think it’s worth ensuring you are clear about your approach to data. By this I mean:
- what data do you have and is valuable to you?
- what additional data do you want?
- what data do you have the bandwidth to cope with?
- what data are you able to house, interrogate and maintain?
7. Artificial Intelligence (AI), Internet of things, extreme automation and all that jazz
Lots of buzz words – worth finding out what they mean. AI may well increase your analytical capabilities. However, I suggest finding tangible examples of their successful application within your sector…
Despite the hype, I suspect the benefits of having a digital distributed ledger will soon outweigh the risks. There are plenty of articles and videos out there to get a basic understanding. Once large corporates or banking institutions adopt this, the wave of adoption will begin.
Concluding takeaway – make a start
One thing is for sure, the comments above will be out of date in a few years' time, but the point is to make a start. Think about your digital knowledge as a discrete category within your broader professional development plans - It will be just as important to keep up with digital/technological innovations as it will be to keep up to date with changing budgeting techniques, accounting standards or developing your soft skills.
The article was first published in Unit 4 Prevero Blog