Another risk that will be overlooked in the near future will be data security, suggests Franco DeBlasio, a CFO partner at Tatum, a professional-services firm, who has been a finance chief for several companies. Beyond the obvious risk of exposing credit-card information and Social Security numbers, there is a long list of back-office data sets that will cause considerable stress for a company if released, he says. Those include data on customer relationship management, supply-chain management, general ledger accounts and invoicing.
That reality is unlikely to go away in 2014. But eventually, DeBlasio says, well-defined rules and roles for cloud vendors and customers will develop, much as regulations for bonded warehouses — physical locations where imported goods and commodities were stored securely — were established in the 1700s and 1800s after issues had been hashed out over decades.
“As people feel the pain of failures, the market and the government will address the issues,” he says. “In today’s age, we’re just starting to cut our teeth on cloud contracts and service-level agreements. They just need to become more sophisticated and defined.”
For 2014, finance chiefs will have to make sure contracts with cloud providers clearly define who is responsible for security, what happens when security is breached, who is responsible for identifying breaches and who will bear related costs, DeBlasio says. For example, if a company’s customer credit-card data is breached, will the company or the vendor pay for the credit-card company’s costs of canceling and reissuing cards?
“Too many companies don’t define those things clearly,” he says. “Very large companies do, but others think they don’t have the time or haven’t even thought of it. And CFOs shouldn’t outsource that to legal. It’s a very detailed process, and people have to sit down and think through the risks they’re taking. That’s purely the CFO’s job.”
Technology on the Go
Gartner’s recent hype-cycle report on mobile devices tracked 49 technologies, four of them expected to reach the “plateau of productivity” within two years. They are:
• High-performance multicore application processors, which allow smartphones and tablets to handle high-definition video and context-aware computing. The technology will allow phone users to accomplish more tasks without PCs and thereby increase their productivity while on the move.
• Magnetometers, or digital compasses, which help significantly with pedestrian navigation, will affect workers who rely on navigation and affect contactless gesture control on mobile devices that use magnetic sensors.
• Multitouch displays, where two or more fingers are used together to control objects or navigate screens.
• Wireless video in wireless LAN settings, which will have its widest impact on the consumer market, such as with home theater systems.
With mobile devices, including smartphones and tablets, the main concern for CFOs in the near future will be establishing centralized mobile device security management plans, Livingstone says. Ideally those plans will follow guidelines established by the National Institute of Standards and Technology.