insight magazine

Four Trends to Watch in 2017

This fab—or fearful—four will rock the finance world in 2017. And guess what, they all hinge on technology. By Kristine Blenkhorn | Winter 2016/17


Satya Nadella is no slouch at predicting trends. The Microsoft CEO told employees in 2015 that the Internet of Things promised to affect all businesses. "Every business will become a software business, build applications, use advanced analytics and provide SaaS services,” he told Computer Weekly.

Nadella’s words couldn’t have rung more true for the business and finance world. While many trends are coming to the fore, the most far-reaching, impactful ones seem to center on how technology is changing the way we do business.

What that means is simply this: Finance professionals will have to move beyond their traditional comfort zones to embrace the changes technology is ushering in this year, and to capitalize on the advantages it promises their businesses.

Trend No. 1: More Machines

In early 2016, Stuart Frankel, CEO and co-founder of Narrative Science, told Time magazine that, “In 2015, artificial intelligence [AI] went mainstream. Major tech companies, including Google, Facebook, Amazon and Twitter, made huge investments in AI, almost all of technology research company Gartner’s strategic predictions included AI, and headlines declared that AI-driven technologies were the next big disruptor to enterprise software. In addition, companies that made huge strides in AI, including Facebook, Microsoft and Google, open-sourced their tools. This makes it likely that in 2016, new inventions will increasingly come to market from companies discovering new ways to apply AI versus building it. With entrepreneurs now having access to low-cost quality AI technologies to create new products, we’ll also likely see an explosion in new startups using AI.”

Gartner estimates that six-billion connected "things" will be actively requesting support from AI platforms by 2018. Even if businesses could hire enough human workers to account for the influx (they can’t), humans simply can’t process such volumes of data with the speed and accuracy of machines.

Besides, executives like AI. A recent Narrative Science study found that 80 percent of executives believe AI solutions boost worker performance and create new jobs. And Gartner estimates that 45 percent of the fastest-growing companies in the world will "employ" more smart machines and virtual assistants than people by 2018.

“From a financial perspective, the emergence of AI-enabled approaches will lead to a higher degree of accountability,” says Doug Dome, founder and CEO of AI platform company Core7, Inc. “For decades, brands have spent hundreds of millions of dollars each year to engage consumers and clients, and that spend included a high degree of inefficiency. But, with digitalization comes data, and with data comes accountability. The game has changed.”

The game has indeed changed. And it has many industry experts wondering what AI technologies will mean to accountants and their jobs. For example, will AI automate transactional functions to such an extent that human beings no longer are needed to perform them? Will accounting professionals need to move up the value chain of activity, from transactions to analytics, strategy, advising and governance, simply to survive?

As Lee Reams, CEO of ClientWhys and, wrote in his 2016 Fortune article, “Will Artificial Intelligence and Cloud Accounting Replace the Accountants of Tomorrow?” “In the accounting industry...we’re already experiencing incredible leaps in tech; bots and cloud accounting solutions make it easier than ever for small business owners to manage their accounting and bookkeeping tasks with the efficiency that only their larger counterparts formerly enjoyed. With these changes, there is a shift in the role accountants play in working with their business clients. This shift will accelerate as more businesses jump to the cloud. Many accountants are riding this wave and will thrive, but many others may suffer the same fate as the dinosaurs.”

Trend No. 2: More ‘Outcomes’

The outcome economy will change the way businesses operate, from top to bottom.
Not familiar with the outcome economy? You’re not alone. A World Economic Forum survey shows that only 10 percent of businesses understand its full implications and are ready to capitalize on it.

As Accenture Technology Labs Fellow Dadong Wan writes for the Industrial Internet Consortium, “Today, most product companies still focus their attention on functional features, quality, cost or services for their products [and services]. In an outcome economy, businesses will compete on their ability to deliver quantifiable results that matter to customers (i.e. the why behind the buy) rather than just selling individual products or services.”

Healthcare systems and life sciences are already moving in this direction, with insurers paying for successful patient outcomes versus interventions or medicines. GE is exploring customer payments based on outcomes, sharing in the revenue and/or savings generated by their solutions. The company believes that fine-tuning industrial processes could lead to raw material cost reductions in the airline and electric utility industries that could result in billions of dollars in savings—or revenue.

“Buying outcomes is part of the evolution of technology,” says Wan, citing how auto insurers now measure customer-driving behavior via telematics and similar technologies to determine premiums. “First, companies bought hardware. Then, software. Now, many buy solutions. But the leaders are already about outcomes. Technology is the means to an end. Show me the end. That’s what I care about.”

Trend No. 3: More Apps

Nearly 50 percent of small businesses should have a mobile app by the end of 2017—a monumental leap considering only 20 percent of small businesses sported them just a year ago, according to 2016 survey results from B2B research company Clutch.

“Three years ago, a small business might see 10 percent of its total traffic coming from mobile, but right now it’s closer to 70 percent. Within the next couple of years, a shift to a mobile app or a mobile-friendly site will become obvious,” says Viktor Marohnic, CEO of app builder Shoutem in response to the results.

What’s more, survey data from Enterprise Mobility Exchange points to $250K–$500K (29.1 percent of respondents) being the most common 2017 budget size for businesses developing mobile apps, followed by $1.5M or more (25.3 percent).

As CFOs and their teams increasingly are asked to analyze and approve spending for major customer-facing apps, those on the finance side are going to have to harness an understanding of the organizational changes necessary to become an app and cloud-based company.

Randall Cross, founder and president of mobile application development and marketing firm Ethervision, sees apps tied to the Internet of Things continuing to be big in 2017, with a surge in augmented and virtual reality apps.

“The big industrial players are creating apps around machine maintenance and the like to make things more predictive,” he says, suggesting that training new employees will get easier and more immersive as augmented and virtual reality play an increasing role. “Our phones will eventually be supplanted by other devices. Think of a heads-up display overlaying your world. A new employee using a new piece of manufacturing equipment will see not just the machine, but also an overlay of data and graphics showing steps in sequence.”

Trend No. 4: More Platforms

Forget pipelines; you need platforms. Traditional business models were designed as pipes. A company put raw materials or data into one end and a product or service emerged from the other end. Each company served as its own pipeline for customer needs.

Digital technologies have disrupted this method, giving rise to the platform business model. Platform users and producers (many times one and the same) create value via the platform for other users (consumers) to consume.  

Your old flip-phone is a pipe—the iPhone is a platform. It’s not just a phone, it’s a TV, camera, Internet browser, GPS, gaming controller, business tool, and more.
Circling back to our emerging outcome economy, companies are quickly learning that products or services not attached to a platform are obsolete—consumers want outcomes, not just products.

“Not everybody can become a platform player, but participating as part of an industry leader’s platform is becoming essential to not being left behind,” Wan cautions. “Not every company is an Apple or GE, but companies need to have a strategy. To take advantage of the multiplier effect, you have to be part of a platform—whether it’s your own or someone else’s.”

While born-in-the-cloud startups and the like are steeped in technology, many traditional firms—and in particular their finance functions—are not. And yet, according to a KPMG study of 549 top executives worldwide, 70 percent said that technology is going to be one of the biggest elements of the role of the CFO. Even so, less than 50 percent of CEOs think that CFOs are doing a good job exploring and implementing new technologies.

As digital developments drive more new growth than any other area in most companies, CFOs and their teams will need to become well-versed in making the most of the digital levers at their disposal in the year ahead. 

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