Sitting on a sofa in his office in San Francisco, Dr. James Canton is pondering the future. Specifically, he’s mulling the technologies he believes will drastically alter the business landscape over the next half-decade. Suddenly, midthought, Canton comes out with a startling statement. ”The CFO of the 21st century,” he says, ”needs to understand technology better than the CIO of the 20th century.”
That’s a sobering prediction, particularly coming from Canton. This is not some pie-in-the-sky crackpot. Canton is president of the highly regarded think tank, the Institute for Global Futures. Moreover, he was a White House advisor on science and technology, as well as a consultant to a raft of Fortune 1000 companies. In short, when it comes to business technology, Canton has a pretty good idea of what’s what.
And frankly, what Canton foresees is a little unsettling. Innovative technologies, he says, will be cropping up at an almost overwhelming pace. ”There has been more technology innovation in the past 50 years than in the previous 5,000.” That’s a lot for any finance manager to contend with.
It won’t get any easier, either. According to Canton, computers, networks, biotechnology, and nanotechnology will be the power tools of the new millennium. Each development feeds another. ”Technology is causing a rapid design of new products, business models, and markets,” he says, ”with all eyes on the needs of the emerging customer.”
Ironically, while whiz-bang products will arrive at a regular clip, few of the underlying technologies will be overnight successes. At Xerox’s Palo Alto Research Center, Nick Sheridon is working on electronic paper. Although he spent the 1980s focused on other projects, he began the paper chase back in the 1970s.
But for CFOs, the quest — and the question — is more immediate. Which leading-edge technologies should a company adopt; which can be ignored?
Unfortunately, emerging technology comes with no guarantee. The good news is that common standards and vendor collaboration are becoming more widespread, so it will be harder to misstep than back in the days of proprietary solutions. The bad news: Innovation does not come cheap. According to the London-based Computer Business Review, companies will have to spend 40 percent of their operating budgets on IT just to keep up with competitors. To stay ahead of the pack, the figure rises to about 60 percent.
That puts the CFO squarely in the hot seat. CEOs may be dazzled, but few projects will get off the ground without the CFO’s imprimatur. Innovation, it seems, still needs a little tire- kicking. ”Companies shouldn’t be overwhelmed by the hype of emerging technology,” says Les Hales, director of Gartner Group in Hong Kong. ”This is still 80 percent a business issue.”
Which brings us back to Canton’s prediction about the 21st century CFO. If he’s right, finance managers have some catching up to do. Toward that, we interviewed scientists, gurus, and industry prognosticators. We asked: What technologies will change the way companies do business over the next five years? We purposely limited the time frame. We weren’t looking for science fiction here, but rather, real innovations that will have a real impact on real corporations.