The CFO (21%) behind the CEO (35%) has emerged the guardian of business resilience, financial health and as the purse string holder for technology investments, according to a global research.
CFOs recognise that the move to servitisation is essential in providing predictability in revenues, expenditure and third-party costs, and are aligning themselves to becoming stewards of identifying cross-business strategies that will build competitive advantage, said IFS, the global cloud enterprise software company.
IFS has released the latest findings of its recent global research polling 2,000 senior decision-makers – VP and above – in France, Germany, Japan, Nordics, UK, USA and the UAE – across Manufacturing, Services, Telecoms, Energy & Resources, Construction & Engineering, and A&D industries. In its last overview, the company highlighted the overarching dependence on AI to create and accelerate business value from servitisation.
The survey points to specific executives as drivers or enablers to successfully make the shift and align the organisation behind it.
At the heart of the business case for servitisation, the CFO is focused on three elements: Faster and more cost-efficient time to market, visibility and predictability into revenues and CAPEX, accelerating organisation alignment across people, processes and technology, to support not only the processes but also to provide the insights required to assess and optimise as they go within their business and intra-company.
CFOs exhibit the greatest urgency in implementing a servitised model out of all C-level respondents (CIOs, CHROs and CTOs), with (32%) prioritising adoption within the next 18 months. This implies change is not only necessary but will deliver business benefits, with progress and success measured by a fully servitised P&L. CFOs are also most likely (26%) to say their role is the one driving the shift within the organisation, as they understand how technology capabilities will reach deep into their organisation and enable it to become more technology-driven with regards to the design and delivery of products and services: Product R&D (34%) and service R&D (32%) are two areas CFOs prioritised when looking at servitised business processes.
The priority outcome CFOs want to achieve from servitisation is enhancing insight-driven decision-making capabilities (32%) – pointing to why AI is their #1 essential technology choice (49%) as it will fuel faster, more accurate and more data-led inputs into the strategic choices that impact the bottom line.
Technology as a revenue growth enhancer
Technology as a revenue growth enhancer makes wise fiscal sense. For example, EAM is a must-have for servitisation success (34%)– assets that are predictively maintained will last longer, have less downtime and result in less expenditure. FSM (40%) maximises profitable revenue streams and enables significant cost savings across the service lifecycle through optimised workforce scheduling and planning. Similarly, the wealth of connected asset data that can be harnessed through the application of automation, ML, IoT, end-to-end connectivity – all CFO “must-implements” – explain why CFOs have emerged as such strong proponents of technology and servitisation.
The CFO’s confidence about the organisational readiness is high at (42%) indicating they have the processes mapped out and are progressing well in their move to servitisation, but still have either organisational impacts on people and processes (23%) or technology needs to overcome, making the CHRO the second most significant executive to drive and enable the transformation.
CHROs are more cautious about servitisation readiness within the organisation, being acutely aware that shifting from a product-focused to a service-focused mindset within their organisations is a barrier to implementing servitisation (42%). However, CHROs are in alignment with the CFO on customer expectations for servitisation, which are high now, and are set to increase. They also agree that technology is essential to success, with AI their top pick (50%).
Alex Rumble, SVP of Corporate Communications, Product Marketing, AR, &CI at IFS, commented: “The CFO’s remit has evolved hugely in the last decade away from financial reporting to understanding and influencing business-wide strategies and aiding transformation." Rumble added: "Our research illustrates this very well and that CFOs not only understand the positive impact of aligning a business behind the customer's expectations, but also the much broader business value of doing so." She concluded: "Today CFOs are visionary advocates of change and digital transformation and will help build predictability in revenue and costs, ultimately the holy grail for CFOs but still technology dependent."
Together, CFOs and CHROs can partner to be a powerful force to not only accelerate servitisation, but also ensure that the whole organisation is primed for success. CHROs must act as a secondary catalyst to mobilise cultural change, acting as a bridge between the business and ensuring the communication and implementation of the overall strategy is not siloed to the C-level.--TradeArabia News Service
Technology as a revenue growth enhancer