‘CFOs are critical to the digital age, they need to embrace digital technologies… or get left behind’

Adebayo Sanni, Oracle country director, and Gbemisola Aruwayo-Obe, director, Business Application Cluster of Oracle Nigeria, in this interview with BusinessDay’s Daniel Ojabo and Edozie Ifebi, talk about role of technology in driving digital innovation and bottom-line performance. Excerpt:

How do you see the role of CFOs today, especially with the advent of technology?

In today’s digital age, the role of CFO’s has actually evolved, compared with what it used to be in the past where their responsibilities were tied specifically to just keeping scores and book keeping into an era where they are in the fore front of innovation – innovation that is actually driving through disruption.

The CFO role has evolved from just book keeping to providing and supporting organizations with innovations that allow companies to be more competitive and also, outside of being more competitive, looking for new areas of business to run.

This however, has to be done from a collaborative point of view. The CFO and the CIO have to work together, as the CFO itself cannot survive or the CIO either. Collaboration is what starts to drive things like talent development, revenue generation, and growth in the organisation.

As we go along, we see that the CFOs are actually playing a critical role in this digital revolution.

Do you believe companies are leveraging technology enough, in a manner that can yield significant changes in bottom-line performance, particularly in the banking sector?

That’s a good question. I think if you look at the banking sector, it is probably the sector that has actually benefited the most from technology in Nigeria.

A lot of banks are starting to look at data that they are gathering by implementing certain technologies. That is, looking at data gathered to help give them informed decisions in terms of the kinds of customers they can work with, trends in customer behaviours, and this is starting to build up. So if you look at it, I believe we are still in the baby phase.

Having read your article titled “Data-driven insights allow CFOs to expose new opportunities for competitiveness,” you said not all industries were at the same stage of maturity with respect to innovation. Now, in the Nigerian market, what sector would you rank top in terms of maturity with respect to innovation?

For me, I would rank the telcos top most because it is either they innovate or they die. After the telcos, then you have the banking sector, then we have the MRDs (Manufacturing, Retail and Distribution), and then we have the public sector.

What role does Oracle play in assisting CFOs with respect to digital innovation?

I think what is important is, for CFOs the reality is that we need a new type of talent for the 21^st Century. The important part is making sure that they understand the fundamentals and as we start to build it up, they need to have some soft skills. Those soft skills are what are actually important for them to be able to understand the effect and the beauty of technology.

Now, if you look at what Oracle is doing in terms of being able to support that, we have several solutions that are in place that can actually help in terms of allowing the CFOs themselves to be able to implement the solution that has actually been put in place, to be able to take that data and to be able to interpret it and in turn, to be able to take decisions that actually help drive innovation.

So, Oracle continues to support the customers and CFOs in that regard through various sets of trainings.

We have the next source of forces… we have cloud, mobile and we have big data. The CFO needs to embrace these technologies. If they don’t, they will be left behind. If you look at Face book today, Face book is currently the world’s most popular media house and yet they don’t create content. Everybody is on Twitter, everybody is on Face book. Alibaba is the most valuable retailer in the world, and yet they have no inventory. Everybody is on Whatsapp, it processes 3 billion messages per day and yet they don’t have any servers.

Why is it imperative for CFOs to embrace digital innovation? What are the benefits for the CFO and the organisation as a whole?

We don’t yet have examples here in Nigeria, obviously. CFOs need to de-emphasise from tangible assets to intangible assets. Like I mentioned earlier, Face Book doesn’t create content. We all have Face Book accounts, we create content for Face Book, people advertise on Face Book which is how Face Book makes their money. Whatsapp, we are all on Whatsapp…now it is also influencing investors. Investors are looking at paying more for companies that are embracing top platforms for innovation and growth.

Companies that are growing faster are companies that have business models that are embracing the cloud, mobile and big data. So, if CFOs don’t understand how to leverage these technologies, they will be left behind. They need to analyse data to attain a deeper insight into the data that they have. They also have to gather unstructured data from various social media platforms – twitter, Face book, etc. They can’t ignore it anymore; it is a trend that has come to stay. Companies that have leveraged on these technologies are making more money. Research by Deloitte revealed that companies that have developed their business model to leverage on these technologies are making 80 percent more than companies that are emphasising on tangible assets. So, it’s a fact.

When you start to look at CFOs and their role, I think the fundamental part of it is to look at how the internal processes can be streamlined. Once you start to look at streamlining internal processes, you drive innovation and you get a huge cost reduction.

McKinsey did a survey and said that the impact of cost reduction via streamlining internal processes was able to reduce by about 36 percent. If you now look at it, what do you now get as a result of cost reduction in driving innovation with the solutions she just described? It also gets to a point where you are helping the organisation itself become more competitive. So, in a world where competition is fierce, this is how you stand out because you are reducing your overall cost, becoming more competitive, you are looking for new ways of creating destruction and more importantly, you are driving revenue growth.

So, I think once you have all of that, those are some of the benefits that an organisation gets by really streamlining internal processes. So it is not just really from a customer side, you come back in and that’s the real role of the CFO. So apart from being a business advisor, they just also provide strategic direction for the organisation and that’s where it’s evolving from just book keeping into this new role where they sit as the strategic adviser to the organisation to drive innovation reducing cost, making the company more competitive and also looking for way to improve profitability and revenue generation. So, the companies that are not adopting these as she just mentioned just end up being left behind and the margin we are seeing between the companies that are adopting these digital transformation or digital technology is getting wider and wider. Eventually, every business will become a digital business without any doubt but the ones in the forefront are the ones that are going to benefit more.

What specific technological model do you recommend to help firms do better in their data analysis?

First, they have to recruit the right talent, people that have the requisite ability to mine data, and analyse it in a meaningful way that people can read and derive value from it. Also, since they already have a finance team, they will have to re-train and re-orientate them. MBA programmes have now introduced technology as part of their curriculum, so that participants can embrace technology. Oracle is also working with universities, making sure that in the curriculum these technologies are taught to accounting and finance students, so that when they graduate, they can deploy the skills they have acquired already. These are two ways CFOs can get and nurture the right talent.

Some challenges faced by CFOs include financial loss as a result of cybercrime and internal collusion by company staff. How can technology help to forestall this?

Users believe that when they purchase a solution, they have the best at that point in time. But technology is dynamic. It is always changing. And there are people out there whose sole job is to study your processes and try to spot loopholes in them to exploit. The CFO needs to continuously look at his internal processes and upgrade, as well as continue to retrain his staff to ensure the effectiveness and efficiency of the process. So CFOs have to repeatedly hone their processes.

What is your take on the cloud computing market in Nigeria? Are Nigerian companies beginning to think in the direction in terms of adopting it?

I think it is inevitable. It is the future. Cloud is one of the 5 key digital disruptors that we have today outside of mobile, internet of things and social. The sooner companies start to embrace it, the better. Nigeria is no exception.

Some of our customers are now waking up to the reality that cloud computing is the future. Surprisingly, the information at their disposal is not adequate. Institutions like the banks will have concerns for security when putting their information on the cloud. We as Oracle are helping our customers go through this change. We are partnering with them. We are developing a roadmap of three to five years, to go along with the customer through this change.

What has the ERP market been like?

Oracle is synonymous with the Enterprise space, but we are also going in to the SME space with our Cloud offering. With as little as 5 users, you can have Oracle ERP. That’s the beauty of our cloud offering. We have ERP in the cloud; we have Enterprise Performance Management solutions in the cloud also. So, it is available to you. You don’t need to implement or buy hardware, and the scalability is there. The cost to acquire this solution is reduced. It is a pay-as-you-go subscription.

The biggest Oracle story is the ability to offer the customer an end-to-end solution whether you’re looking at it from storage infrastructure to applications, and ERP is a key part of that. This is the value advantage that Oracle brings to the table today ahead of its competition. So our penetration is a function of either singling out the ERP or our ability to provide end-to-end service, which has been really Oracle’s strategy, not just globally, but specifically in Nigeria as well. ERP is a function of the entire suit of services that we offer but there is opportunity not only in the enterprise space that we are known for, but in penetrating deeper into the SME space, which is the future. SMEs are the future. Most companies in Nigeria are SMEs. Our strategy and our focus now are on how we can reach the SMEs.

How has Oracle been able to contribute in terms of CSR?

Oracle took a strategic decision two years ago to invest in Africa, specifically in Nigeria and Kenya. Oracle has more than tripled its work force in Nigeria, all fully local nationals. The management is full of Nigerians. The company has also invested millions in opening offices in Lagos and Abuja. We have partnered with the likes of Lagos state, Edo state, and other states in terms of capacity building. The governor wants to drive accountability through better governance.

So, we are training all the CSOs, the entry officers to understand how they can govern better. We are looking at doing the same thing with the Federal government. We have grants that a lot of companies have benefitted from. Co-Creation Hub (CC Hub) is not any different. Women in Technology also – where women are empowered with education right from the secondary school level. We have courses in the University of Lagos, Lagos state university, and Lagos state polytechnic, where we are starting to teach a lot of the students in Java as well as in CRM solutions. Oracle itself, over the last 2 years has consistently invested in different areas. First in terms of what we are doing – empowering people from women to experts in terms of the Oracle solution, into partnering with the government itself in helping it drive better governance.

This is not where we are stopping. We are here to stay. We have demonstrated this by our ability to increase our work force, and by our ability to not only invest in Lagos which is what is typically expected of international companies, but to also have an investment in Abuja, as well as giving grants to deserving grantees that have a purpose in mind to encourage and uplift Nigerians.

Another way that Oracle is aiding the government is that the payroll of the Federal Government is also an Oracle solution, and this has saved the government millions of naira in ghost workers.