Tech industry CEOs are getting more internal support than they might realize in helping their businesses achieve “tech balance.” Findings from Protiviti’s 2019 Global Finance Trends survey suggest that CFOs at technology companies are helping their organizations, knowingly or not, to make tech balance a formal business strategy. This is not a surprise, though, given that the finance function is a center of technology and process innovation in many businesses today — including tech firms.
The core message of tech balance is that innovation alone is not enough for a technology business to survive and thrive over the long term. Talent and responsibility are essential to success, too. We introduced the three main pillars of tech balance in our Responsible Technology Firm of the Future series. This post looks at some tech industry-related findings from our recent finance trends survey that help to highlight how many finance functions are contributing to their company’s broader pursuit of tech balance:
Responsibility: Security and Privacy of Data
Security and privacy of data topped the list of priorities for finance leaders in our general survey. But these issues also ranked first for most tech industry respondents — 83% cited them as their top priority. The elevation of data security and privacy as the highest priority for CFOs is due partly to the fact that finance functions, and the businesses that they serve, are becoming increasingly data-driven. Data-related compliance demands are a major factor as well.
Technology companies are under intense pressure to demonstrate that they are managing personal data and maintaining privacy protections appropriately. They face stringent and quickly multiplying regulations, such as the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). And the regulatory fines and investigations that some leading tech firms have been experiencing in Europe suggest companies should be prepared to face a similar U.S. tech crackdown.
Data security and privacy relate to the “responsibility” pillar of tech balance, which includes effectively managing critical risks that could impair the company’s brand and reputation. The customer and financial data that a tech firm handles are a prime target for hackers — and every breach and related public disclosure erodes a business’s brand and reputation.
Finance leaders ranking data security and privacy at the top of their list of priorities may be doing so reactively, proactively or a little of both. Regardless, their recognition of the need for their organizations to take a responsible approach to data security and management is a critical step toward the whole business achieving tech balance.
Innovation: Enhanced Data Analytics and Related Process Improvements
Finance leaders from the tech industry who responded to our recent finance trends survey ranked enhanced data analytics and related process improvements second and third, respectively, on their list of top priorities. Internal pressure is heightening the finance function’s focus on using enhanced data analytics. As our finance trends survey report explains, “CFOs and finance leaders have more customers than ever before within the organization. And those customers want specific insights, metrics and analytics that provide insights into financial and operational performance, and thus drive strategic decision-making.”
To deliver on those expectations, finance organizations need to have the right technology, processes and practices in place. This brings us to the tech balance pillar of “innovation.” It is imperative for tech executives to stay ahead of the digital change curve, and many finance leaders at technology companies are doing exactly that. They are embracing the cloud model, implementing robotic process automation (RPA) and artificial intelligence (AI), and more, to harness the power of data, streamline processes and make better use of human talent.
However, at the same time, the broader business may be struggling to keep pace with technological change, especially if the company was not “born digital” and is saddled with legacy IT infrastructure. So, in many tech firms, there may be a disconnect between technological advancement in the finance function and what’s happening (or not) in other parts of the business. The opportunity for finance executives and the functions they lead is to help “disrupt” their companies in a positive way — for example, by sharing lessons learned with RPA and AI experimentation or setting the standard for strong data management practices.
Talent: The Dual Challenges of Hiring and Retention
“Talent” is the third pillar of tech balance and, perhaps, the most difficult to align in this tight labor market. It can be just as challenging for tech firms to find skilled talent for their back office as for their product development teams. In our 2019 Finance Trends survey, nearly two-thirds (64%) of finance leaders in the tech industry said recruiting and retaining talent is the highest staff- and skills-related priority for their organization over the next 12 months.
We are seeing more finance leaders working to overcome staff and skills gaps in their functions in two ways. First, they are implementing advanced technologies, like RPA, not only to meet growing data demands from customers, but also to handle routine accounting and finance processes and increase overall staff efficiency. Second, they are engaging external resources and exploring the new labor model for finance. That includes tapping managed services providers to access specialized skills on demand and for as long as they are needed.
These and other findings from our recent survey suggest that finance functions have a critical role to play in helping technology firms achieve the new tech balance. C-level tech executives may want to take stock of the digital change underway in their finance organization to see what they can learn and apply elsewhere in the business as they work toward a “responsible technology firm of the future” vision.