Page 55 - Finanancial Management_Feb_Apr23

discern deeper patterns in their supply Transforming a supply chain and
chain — perhaps even predicting how and
Some hope to achieve a more autonomous integrating it digitally also requires
when to expect shortages and slowdowns.
supply chain, with AI able to adjust orders
and sales volumes based on information an upfront investment in compiling
from a company’s own logistics as well as
the broader markets. and cleaning up data sources.
New technologies also are building
stronger data connections between
companies. Blockchain — the digital
technology that allows for unified, secure,
and immutable recordkeeping across that, too — it’s as simple as creating a run in parallel with your existing systems,
organisations — has attracted plenty of database in the cloud — blockchain offers see the value that’s derived, and be able to
hype, especially in the supply chain world. some unique strengths, Vincent and quantitatively and qualitatively measure
“Supply chain is possibly the most others said. what return you’re getting from that,” he
advanced application of blockchain that Because of its design, blockchain said.
we see in the business world,” Baucherel creates “immutable” records that cannot The CFO can also raise questions that
said. “The concept of blockchain is literally be secretly edited by any party. That could others aren’t asking, Higgins said. For
creating blocks of transactions that can be make it easier for auditors and others to example, if data is moving to the cloud,
visible and unchanging. That was inspect records and ensure that no party is what will be lost in terms of customisation
immediately attractive to people talking altering invoices or other information, or gained in convenience? For any new
about the movement of goods.” Vincent said. technology, was a proper “make vs. buy”
So far, the technology has shown up in Blockchains can also provide a platform analysis made?
high-profile projects such as the Aura for other advancements. For example, Companies also should be asking
Blockchain Consortium, a collaboration of blockchains can support smart contracts, ethical questions about the data they’re
the luxury goods companies LVMH, in which transactions automatically occur collecting, especially if they’re recording it
Cartier, and Prada. The project aims to when various criteria are met. Those on an immutable blockchain, Vincent said.
allow customers to verify a product’s contracts can be fed with data from the IoT, “We might have to be very sceptical
authenticity and even trace it back to its from sensors in factories to climate about what data is being processed and put
raw materials. observations. on blockchain,” she said.
Baucherel also pointed to efforts like “Blockchain gives that common trading Higgins agreed that finance can design
Halcyon, a blockchain for tracking platform for any device to input data into ways to monitor a project’s progress.
engineering and construction projects, other smart contracts that can be used by “Too often, there’s that one-time battle
and AgriLedger, a blockchain effort different organisations,” Vincent said. for that capital request, and then there’s no
focused on farmers. KPMG’s Higgins said However, she and others cautioned that follow on, and then [the project] drifts,” he
the technology is also gaining traction for the technology is in its early days. There said. He suggests “periodic check-ins and
reporting on environmental, social, and are few “off-the-shelf” solutions, meaning health reviews. ‘Did we spend the dollars
governance (ESG) needs. that most projects will require developers we expected, and did we get the return?’”
The greatest promise of blockchain in and other resources. In that time after deployment, the CFO
this area is in sharing data across the many “It’s still a very powerful technology,” can be not just a sceptic but a supporter,
companies that constitute a supply chain, Higgins said, “but most companies have helping to ensure that investments get
said Nishani Vincent, ACMA, CGMA, Ph.D., not ‘cracked the code’ on how they’re going attention and continued buy-in
an associate professor of accounting at the to squeeze value from it.” throughout their life cycle, Ross said.
University of Tennessee at Chattanooga in Baucherel said that the earliest adopters “Too many projects will start off with a
the US. will tend to be the largest companies or lot of zest, a lot of enthusiasm, and that
“We maintain our records in our own those supplying them. fizzles away, never really giving it the
books. We make mistakes. There is a lack “It’s very unlikely that a small company proper chance it deserves,” he said.
of transparency and also the inability to would say, ‘We’re going to move to the And with supply chains likely to remain
reconcile because we maintain them blockchain.’ Blockchain’s very specifically tangled for the foreseeable future, the
separately,” said Vincent, who previously useful for big, distributed networks,” she companies that succeed in these projects
worked as a consultant on tech projects. said. are likely to see substantial returns. n
“So, we spend a lot of time reconciling,
going back and forth, solving errors in our 4. Test-drive new technology and
invoices, purchase orders, and sales monitor its performance Andrew Kenney is a freelance writer
orders,” she said. A CFO should not just look at projections based in the US. To comment on this
Blockchain could help to change that by and figures but should also visit real-world article or to suggest an idea for
having companies operate from a single, sites and help to design tests of new another article, contact Oliver Rowe at
shared data source — the blockchain. technology, Ross suggested. Oliver.Rowe@aicpa-cima.com.
While other digital technologies can do “You need to do a proof of concept, let it

FM-MAGAZINE.COM April 2023 I FM MAGAZINE I 11