Finance in a Digital World
“Wherever you find inefficiency nowadays, you will find disruption.”
On Thursday April 20 Deloitte hosted the annual CFO Dinner about 'Finance in a digital world'. Our keynote speaker Stefan Hyttfors shared his insights on the current exponential technological developments and their possible impact on our businesses.
Annual CFO Dinner – April 20, 2017
Looking back on Annual CFO Dinner about 'Finance in a digital world', that took place on April 20, 2017. Our keynote speaker Stefan Hyttfors shared his insights on the current exponential technological developments and their possible impact on our businesses.
“Wherever you find inefficiency nowadays, you will find disruption.” According to Swedish futurist Stefan Hyttfors, keynote speaker at the Annual CFO Dinner on April 20, we have to start asking ourselves if there is anything in the future a human being can do better than a machine. “As long as we pretend that we can create more jobs and talk about automation and digitalisation at the same time, we are fooling ourselves. We have to acknowledge the end of work right now.”
Imagine you are the CFO of Kodak in the seventies, suggests Hyttfors at the CFO Dinner in De Nieuwe Kerk in Amsterdam: “With a 90% market share in film. Then Steven Sasson approaches you in 1975 with the first digital camera. He basically tells you: we don’t need our own products anymore. You are not that impressed with the camera that weighs 3,6 kilo’s and takes lousy shots of 0,01 megapixel. Not even when Sasson assures you that in 15 years time it will be good enough to compete with film. Today we know it took him less than that and Kodak didn’t win the race. But would you, as a CFO, have said: ‘Let’s disrupt ourselves before somebody else does’? May be not. That’s easy in theory, but very hard in real life. Kodak wasn’t a bad company. They were innovating. But we are taking one trillion pictures each year right now. It was unimaginable then to everyone here that seven-year-olds take pictures of themselves every day.”
Hyttfors emphasizes the impossibility of predicting the future in an exponential world. But what we do know is that the importance of augmented reality will increase: already millions of people are playing games like Pokémon Go on their smartphones. “You don’t go to the bank anymore. You pick up your phone to see how much the bank owes you. Some guys try to catch little red monsters, you try to catch green ones. We can transact online. We don't need a bank. We are all living in a virtual reality.”
We also already have all sorts of technologies to put inside the body, from bionic arms to implants, states the futurist. “We will go from mobiles to wearables to implants. If we change everything below the head, is the person still a human or a robot or vice-versa? Who's to decide? Somehow, somewhere we're going to grow into this. We may not like it, but we will do it anyway, just as we started creating the atomic bomb. It doesn’t come overnight. But in twenty years time it will be normal to do things to your body that you wouldn’t do today.”
“All you need is a digital platform. The marketing costs go down to zero.”
Digitalization leads to demonetization, decentralization and dematerialization, says Hyttfors. “Five years ago you hired a DVD with your kids for the weekend. Now you can stream it. That’s a typical example of dematerialization: you don’t need a disc anymore, you don’t need someone in China to produce it for seven cents a disc, you don’t need to ship the discs back, no trucks, no stores. All you need is a digital platform. The marketing costs go down to zero. Remember how everybody thought Wikipedia was a silly concept in the beginning? People were convinced that it would be filled with errors. Instead, people like to contribute to and improve the information. There’s no need for a boss, no hierarchy. That is a truly new concept. Take a phenomenon like crowd funding: you don’t need to go to the bank. You can create a focus group that tells you they believe in your product. Get yourself a bitcoin wallet. Even if you are a thirteen-year old boy living in India. No borders, no walls: technology doesn’t care about walls. Now, in 2017, an average 50% of all people on the planet are still not connected. That’s the big shift we’re going into: the coming 5 to 10 years the people in the same network will double. Those who are entering right now are the ones who don’t even have a bank account.”
“Digitalization is also about assets and resources that we use inefficiently today and a different attitude on how to consume and share.”
Create, innovate, change
As human beings we always have the same relationship to new technology. What’s around when you were born, we don’t talk about: that’s the way it’s always been. What they invented between your age of 15 and 35 is interesting: maybe it provides a new career opportunity. But everything they invented after you’re 35 is just un-normal. “That is something to think about when you have executive meetings. Look around: do we really understand? Do we have any clue? In 15 years everybody will have access to quantum computing. Is there anything in the future a human being can do better than a machine? Since October, every Tesla-car leaves the factory with the necessary hardware for full autonomous driving. You can sit on the back seat and the car will drive you to your destination. The reason we’re not using it today is the law, not the technology. So you have to sit in front and pretend you are driving. Cars are very inefficient. We use them for one hour out of 24. The younger generation will share cars. Digitalization is also about assets and resources that we use inefficiently today and a different attitude on how to consume and share. Since three decades we have been using more resources than the planet can give. We have to create, to innovate, to change. Fortunately the generation growing up today has the power to be innovative.”
“We have to think about value in the digital world. As long as we pretend we can create a lot of jobs, we are fooling ourselves.”
Value in the digital world
“But that generation claims that their lives are gone when there’s no WiFi”, is a reaction from the audience. “How do we deal with that?” “To us, everybody over 35, this is un-normal”, is Hyttfors’ response. “Not everything will be hallelujah. In twenty years time we might look back at this time and conclude that we were so immature. Why fly to the Maldives if you can put on a headset and have that experience in your own living room? That’s a bad development for airlines and travel agencies, but a good thing overall. Of course there is a risk that people will have a smartphone addiction. We will see people that stay in bed with their headsets 24/7 and people who detox. I am having a one month Facebook leave myself.” The expanding technology also has severe consequences for the way we look at work. “We have to think about value in the digital world. As long as we pretend we can create a lot of jobs, we are fooling ourselves. Since the planet population is growing with one million people each week, not everybody is needed anymore. In the end, performance in an organization or society might be much more about what’s going on inside instead of creating more work. And the job of a CFO more about emotion, empathy, empowering others. Depending on how you invest, you will create the future.”
About Stefan Hyttfors:
Stefan is an acclaimed futurist, author and global speaker, focused on disruptive technologies, behavioral change and next generation leadership. Stefan has a background as journalist and economist. He has been awarded the Swedish speaker of the year two times.
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