CFOs of leading global organisations understand that their role extends beyond mere financial oversight; they are pivotal in steering organisation-wide transformation, particularly in the realm of technological advancement.
By Kovin Nayager, senior manager and chief financial officer & enterprise value lead for Accenture, Africa
John Murphy, president and CEO of The Coca-Cola Company, encapsulates this perspective well: “Technology is the great leveller in today’s world, and it demands a more horizontal focus on how you do business. You need to have an end-to-end view of your business environment and then build your organisation appropriately. It requires a more networked view of the world.”
Recent research from Accenture indicates that a staggering 98% of companies regard technology as their primary lever for reinvention. Consequently, CFOs recognise that cultivating a robust digital core is essential for any meaningful transformation. This insight is particularly relevant for South African CFOs, who must broaden their strategic scope to keep pace with rapid technological changes.
The research highlights an alarming trend: change is accelerating at unprecedented rates, increasing by 183% over the past four years and 33% in 2023 alone. Core organisational disruptors now include technology advancements, evolving consumer preferences, emerging competitors, and the rising cost of capital, with technology emerging as the greatest concern.
Technological advancements are not merely facilitators of change; they are driving transformation, making a strong digital core vital for harnessing the full potential of generative AI, cloud-based ERP modernisation, real-time data flows, and intelligent automation. Meanwhile, competition is intensifying, as industry players seek relevance amid disruptive digital-native startups, disintermediation, and sovereign wealth funds diversifying their portfolios.
CFOs are facing increasing pressure to navigate these transformations effectively. Fortunately, they are uniquely positioned to guide their organisations through this turbulent landscape, thanks to their strategic decision-making authority and comprehensive organisational knowledge.
To keep up with these disruptions, CFOs must enhance their transformation efforts. CFOs with stronger reinvention ambitions are nearly twice as likely to achieve successful outcomes when they commence their transformations with a clear focus on value creation.
Accenture’s report outlines four key courses of action for CFOs: developing a ‘North Star Strategy,’ using Gen AI as a reinvention enabler, integrating technology and people, and fostering effective collaboration to drive value. While these steps are interconnected, in the South African context, prioritising AI as a reinvention enabler must take precedence.
The generative AI (GenAI) market in South Africa is projected to reach $0,32-billion by 2024, with a remarkable annual growth rate of 46,78% expected to elevate it to $3,2-billion by 2030. This growth underscores the urgent need for South African businesses to embrace GenAI to maintain competitiveness in an ever-evolving global landscape.
Despite the potential benefits of AI, only 35% of CFOs have fully implemented AI and automation, revealing significant opportunities for forward-thinking CFOs to capitalise on this technology by leveraging a robust digital core. Investment in Generative AI should be rooted in a thorough and objective assessment of the business case.
To execute at scale, CFOs must establish a comprehensive change management framework that includes role analysis, an AI risk management plan and clear governance principles to hold stakeholders accountable for the design, deployment, and use of AI technologies.
This governance framework should encompass conducting risk assessments to evaluate AI use cases based on criteria such as fairness, transparency, and human impact.
CFOs must ensure that systems are designed and implemented to capture value, utilising business case templates and KPIs, while creating a strategic generative AI ecosystem that incorporates vendor assessments and cost estimators. Seamless integration of GenAI into existing organisational structures is another critical aspect of ensuring its success.
This process is ongoing – systematic testing should be carried out to maintain ongoing fairness, accuracy, and safety, alongside regular monitoring and mitigation efforts. Additionally, fostering cross-functional collaboration is essential to effectively address workforce impacts, legal compliance, sustainability, privacy, and security concerns across the enterprise.
As South Africa’s legal system is still grappling with AI oversight, internal measures to govern its use are paramount.
Integrating GenAI into your organisation is pointless if you don’t utilise existing data effectively. Accurate and accessible enterprise data is crucial for a strong digital core; however, many companies struggle with siloed data, limiting their ability to extract value.
To fully leverage generative AI, approximately 50% of companies need to overhaul their data strategies, learning from data-mature organisations that democratise data and integrate various sources into their analytic models.
The C-suite can get caught up in the potential and newness of this technology at the risk of ignoring the human element. In South Africa, especially, fears surrounding AI and job replacement are prevalent in an already volatile economy.
CFOs and leaders must adapt talent strategies to align with evolving business needs, ensuring that employees feel healthy, connected, purposeful, and equipped with marketable skills to unlock their full potential and drive continuous growth.
This approach not only benefits broader organisational objectives but also fosters a culture of innovation. By integrating technology, data, and people within an interoperable enterprise-wide system, organisations can unlock up to an 11% productivity premium, which can translate into significant profitability and revenue growth.
This people-focused strategy also involves tapping into external resources. CFOs should collaborate at scale by building relationships with external vendors and ecosystem partners to gain insights into best practices and co-innovate for new value streams, driving their organisations towards a more resilient and adaptable future.
To thrive in an increasingly digital landscape, South African CFOs must embrace generative AI as a transformative force within their organisations. By doing so, they can unlock unprecedented value, drive sustainable growth, and position their companies for long-term success in a rapidly evolving market.