Categories: Ethereum

Blockchain As A Competitive Edge? CFOs Should Think Twice Before Saying No

Click here to view original web page at www.ethnews.com

CFOs are usually skeptical about talk of game-changing innovation. Discussions around blockchain are going to be different.

There's a reason some jokers in business refer to their finance group as the "sales prevention department." Corporate CFOs and controllers take very seriously their responsibility for safeguarding company resources, especially cash. When it comes to investing in new technology, the typical CFO is likely to say "no" right off the bat, and force the person making the capital request back to the drawing board.

Investing in blockchain technology, whether as a penny saver or game changer, should involve a different dynamic. People on the business side should be extra careful to avoid hype and instead argue the strategic benefits of exploring and experimenting with this new approach to data storage and verification. CFOs, for their part, will want to check their natural impulses and keep an open mind.

Unlike 3D TV, blockchain tech is here to stay. According to survey findings published in December by Deloitte Consulting LLP:

"While blockchain is not quite ready for primetime, it is getting closer to its breakout moment every day. The academic hypotheses of five years ago are steadily becoming a reality. Momentum is shifting from a focus on learning and exploring the potential of the technology to identifying and building practical business applications."

A clear majority (78 percent) of business executives who responded to the survey believed their firms stand to lose competitive advantage if they do not eventually implement blockchain. The sampling of opinion involved more than 1,000 senior managers from seven countries.

The key word here is "eventually," a concept that does not fit neatly into traditional financial metrics for assessing the business value expected from new tech tools. Consider one common yardstick CFOs use: payback period. That metric ignores the potential economic bonanza generated after the break-even period. Worse, it's terrifyingly narrow in the face of inventions that will change the way businesses operate over the long run.

CFOs need to think differently about blockchain technology, which any sane person will agree is in its early days. Deloitte notes that "84 percent [of survey respondents] said that blockchain will eventually reach mainstream adoption." The big "but" is that half said blockchain is either (a) not listed among their organizations' top five strategic priorities or (b) not considered a priority at all.

The apparent contradiction is understandable. Industries and individual enterprises stationed at the bleeding edge are just now moving out of the proof-of-concept stage and starting to build applications that will be improved, chucked out, or reinvented as times goes by. And many large enterprises prefer to wait and see, letting the early adopters fail first, then coming up from behind to grab the lessons learned.

Deloitte says the best move now is for CFOs and their C-suite counterparts to set aside the tech-oriented debates and focus instead "on how blockchain will potentially disrupt or shift your operating model." The advisory firm went on to suggest that "at the very least, keep an eye on blockchain so that [you] can take advantage of opportunities when they present themselves." Take pains to understand the transformative nature of blockchain and insist that senior team leaders set up listening posts inside and outside your industry. Finally, take steps now to evolve with the stories of success as well as failure.

It is also smart to have a small, internal pilot or two. "It may be best to focus on an internal issue such as intercompany transactions," says Deloitte. That process is known for being slow, error-prone, and labor intensive. The firm refers to one case (name withheld) of a large global company that has more than 2,000 people working to track, store, audit, and account for transactions involving the transfer of data and payments among 1,000+ worldwide subsidiaries. The cost of maintaining this broken legacy is no doubt off the charts. CFOs should put away yesterday's performance metrics and educate themselves and their teams on how blockchain applications could possibly help.

Mary Driscoll covers finance and business trends as a staff writer for ETHNews. She formerly served as an editor for management and finance at the Economist Intelligence Unit and a research principal at APQC. In addition, she has written for The Wall Street Journal CFO Report, HBR-online, and strategy + business. Her book on corporate treasury management was published by John Wiley & Sons, Inc. Mary enjoys hiking and skiing in the Sierras with family. Her goal in life is to win big on Jeopardy.

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest Supply chain management, Reconciliation or other Ethereum business and finance news.

There’s a reason some jokers in business refer to their finance group as […]

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama
Tags: ethether

Recent Posts

Bitcoin Is Up Against An Extremely Important And Powerful Resistance Zone On The Monthly Chart: The Kijun-Sen (Base Line)

We can identify the price action causes of why price is finding it difficult to move higher by analyzing longer… Read More

40 mins ago

BTC ATM goes missing and no one notices

When you think of thieves stealing an ATM, the mind jumps to the idea of an exciting crime. Maybe there’s… Read More

40 mins ago

Major Swedish Bank Orders Negative Interest Rate on Euro Deposits

Sub-zero interest rates have become the norm in some countries, especially in Europe. Nordic nations such as Sweden and Denmark… Read More

40 mins ago

Researchers Concur Current Bitcoin Market Cycle is Only Just Beginning

Bitcoin price cycles can be influenced by a number of factors, FOMO and public sentiment is one, and mining profitability… Read More

41 mins ago

Hopes for Bitcoin as China’s Renminbi Drops to 11-Year Low

A recent plunge in the bitcoin price is looking to negate some of its losses as China’s currency weakens to… Read More

41 mins ago

Why Bitcoin Rules in the ‘Insane’ World of Negative Interest Rates

Central banks around the world are on a negative rate binge to further a compelling case for bitcoin.. | Source:… Read More

41 mins ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More