Stuart Kerr CA on digital transformation and the modern CFO
Andrew Harbison talks to Stuart Kerr CA, CFO of Incremental Group, about digital transformation, the modern CFO and the CA qualification.
“I think as a CFO of a technology business I can see the evolution more than others,” says Stuart Kerr CA, discussing how the role of the finance professional is experiencing a significant change.
“You can see more and more that the CFO role is merging into more of a COO role. It’s not just a functional role anymore, CFOs are business leaders involved in decision making at a boardroom level.”
This, says Stuart, is down to more businesses realising that technology is probably the most important external force shaping how their business operates. And, with the richness of the outputs from a modern Enterprise Resource Plan (ERP) providing such high quality and well-interpreted data, the influence of the CFO can now be felt across the organisation, which allows the CFO role to now converge with that of the COO.
Stuart believes the sheer scale and pace of change in digital technology presents a huge challenge for companies, but for those that embrace technology and strive to understand what digital transformation can deliver for them, the reward can be a significant competitive advantage and cause disruption in their chosen markets.
You can see more and more that the CFO role is merging into more of a COO role. It’s not just a functional role anymore, CFOs are business leaders involved in decision making at a boardroom level.
From the Big Four to entrepreneur
With this in mind, Stuart, along with two of his former colleagues, decided to establish Incremental Group, of which Stuart is CFO.
Helping both government and businesses to digitally transform their businesses one step at a time, Incremental Group provides digital services that enable customers to evolve, transform and keep pace with rapidly changing technology.
“We wanted to establish a business that firstly helped organisations understand how digital technology could help them do more, but more importantly would then stand beside them through the journey to ensure it delivered the better business outcomes that were expected,” Stuart explains.
Since qualifying as a CA, Stuart’s career has gone through a process of evolution itself. Having spent 15 years at PwC, mostly working in the M&A side of the business, he then moved on to the Amor Group.
“Amor was a private equity backed business and as such there was inevitably going to be a liquidity event in the not too distant future after joining,” says Stuart.
In 2013 Amor was sold to Lockheed Martin, a global aerospace and defence company.
Going from an entrepreneurial environment with a staff of 600, to becoming part of one of the world’s largest companies was a culture shift for Stuart and two of his Amor colleagues, Neil Logan and Craig Donnelly.
“We realised that it wasn’t an environment that was suited to our aspirations and what we wanted to achieve. Yes, if we had stayed, there would have been great financial rewards and benefits but we all enjoyed the thrill of being part of a fast-paced entrepreneurial based business and that wasn’t there anymore.”
It was during this time that the three colleagues identified a gap in the market to help businesses digitally transform their organisations.
After receiving funding from Maven Capital, Scottish Investment Bank and Clydesdale Bank, they acquired First eBusiness Solutions as a platform business, going on to formally launch Incremental in December last year.
The changing face of the finance function
Understanding how new technology impacts a business is no longer exclusively the realm of the IT department. It has become more and more the domain of the CFO.
It is now common for a CFO to have the lead responsibility when it comes to the implementation of new technology into their business.
Increasingly, the key priority for many CFOs is digital transformation, for which they are becoming personally accountable for...
“There is an inevitability about that,” says Stuart, “as new technology often requires substantial financial investment and the CFO is the one that can apply an objective and quantified approach to such strategic projects.”
He continues: “Increasingly, the key priority for many CFOs is digital transformation for which they are becoming personally accountable for and therefore it’s only right that they are the person who oversees the implementation of the new technology that knits the many layers of their business together.”
“At Incremental we typically sell to the business rather than the IT department and, more often than not, that is the FD or CFO,” says Stuart.
"It is for this reason that many of our consulting staff come from a finance background.
“You wouldn’t think using accountants to sell digital technology is a great idea,” chuckles Stuart. “But it’s a really strong position to come from.
“They understand what they are selling and implementing and they are able to talk the same language as the CFO or FD they are advising.”
Automation, not eradication
With companies from IBM to Salesforce investing in artificial intelligence (AI), many businesses are already using such technology in their day-to-day operations.
Stuart believes that over the next five years AI will become far more commonplace within the finance function, automating many of the lower level manual tasks within a finance team.
“Those more mundane tasks will disappear and be replaced by technology. That’s not a bad thing.
“What that does is free up the time, not just at a junior level but all the way up to CFO. The technology has effectively reduced the detailed burden, allowing time to be focused more valuably on interpreting and improving business performance.”
Although he admits that the role of the finance function will be impacted by this increase in automation, there will still be a need for qualified professionals to work with the outputs and implement the actions to drive business performance improvements.
The culture that the CA qualification instils in you prepares you for senior leadership positions, both in practice and business.
“This kind of process will provide far richer data and it becomes more of a value-add process rather than just churning out a set of management accounts every month.
“It allows better conversations to be had that can ignite positive change within a business.”
Acknowledging that this increased automation can occasionally come up against resistance from within a business, Stuart brings up a technology widely used these days which, in the grand scheme of things, hasn’t been around for that long.
“Take the humble spreadsheet,” he says.
“It made a significant change on how finance professionals conducted their everyday work. It wasn’t that long ago that people used paper ledgers, but the seismic shift created by the introduction of spreadsheets is not looked at disdainfully, and therefore such changes should be embraced rather than resisted.”
The CA qualification in the modern world
Although the rate at which technology is changing means businesses are in a constant race to keep up, Stuart says that CAs have the upper hand.
“The culture that the CA qualification instills in you prepares you for senior leadership positions, both in practice and business.
“The nature of the training, the evolving content of the qualification, together with the exposure to different companies and the different services and offerings you get to experience during your training provide a huge breadth of experience from very early in your career.
“The responsibility that is afforded to you very early in your career gives you a real sense of the value of the qualification and once you’ve achieved it you’ve had a significant amount of experience.
“That experience allowed me to jump directly into a finance director role in industry and I haven’t looked back since.”