Khwaja's Take: Board's role on Business Transformation, Cash Flow Modeling

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1. Corporate Boards and Business aligned Technology Transformation

Corporate boards play a critical role in technology transformation to drive business value. They set the vision and oversee senior management for business aligned technology transformation, and minimize potential risks and threats through effective risk oversight. But to do this effectively, directors must understand technology’s implications for the business and have the expertise to make informed decisions. In this blog post, I’ll explore why it’s so important for corporate boards to understand technology and what they can do to create value through technology transformation.

The Role of Technology in Business Transformation

Technology is driving business transformation across industries. It’s changing how we work, how we live, and how we interact with the world around us. And it’s having a profound impact on businesses of all sizes. For example, small businesses are using technology to reach new markets, create new products and services, and improve operational efficiency. And large businesses are using technology to drive growth, enter new markets, and improve customer experience. There’s no doubt that technology is transforming businesses—and that corporate boards must understand this transformation if they want to create value for their shareholders.

All directors need to understand the power of technology in business - failure to adapt will mean stagnation!?-Khwaja Shaik, Board Advisor

The Importance of Understanding Technology and Risk Management for Businesses

To be effective stewards of shareholder value, directors must understand the connections between technology and the business. They need to understand how technology is being used to drive business transformation across industries and within their own sector. And they need to have a clear vision for how technology can be used to create value for all stakeholders. Without this understanding, directors will be unable to make informed decisions about the direction of the company or the allocation of resources.

Figure above refers to McKinsey & Company's point of view on the power of tech infused personalization, agile operating models and capability building to unlock value.

"Organizations must be strategic with their technology investments if they want to succeed in a competitive digital world. Know and plan ahead! -Khwaja Shaik, Board Advisor

For example, I counsel Bank CEOs and C-suite to take into account how technology can improve financial inclusion and accessibility for all customers regardless of race or socioeconomic status when making decisions about how best to use technology within their organization. This includes providing better access to credit products such as small business loans as well as ensuring that certain demographic groups are not excluded from accessing certain services due to an inability to meet certain prerequisites such as having a good credit score or sufficient collateral assets available for loan approval purposes. Additionally, banks must also consider using technologies such as biometric authentication methods which can help make the process easier and more secure while still maintaining compliance with anti-money laundering regulations set forth by governing bodies around the world.?

Tech expertise and Risk Oversight is essential for every corporate board director: no excuses for ignorance in the boardroom. -Khwaja Shaik, Board Advisor

Creating Value Through Business-aligned Technology Transformation

Corporate boards can create value through effective oversight on technology transformation. The corporate boards must understand the connections between technology and the business, determine a clear vision and goals for their technology transformation, and anticipating and minimizing potential risks and threats. By taking these steps, boards will be better positioned to make informed decisions about the direction of the company and the allocation of resources—and they will be better able to create value for their shareholders.

Planning ahead brings significant value to organizations. Make sure your Board has purpose aligned board committees to take the time to carefully consider and drive value for all stakeholders! -Khwaja Shaik, Board Advisor

2. Planning for Cash Flow During Uncertain Times: What CFOs and Boards Can Do Now

As the world continues to navigate through the uncertainty of geopolitical risk, soft-landing/hard-landing scenarios and the recession, one of the most important tasks for a CFO is to plan for cash-flow. This process involves revisiting business unit assumptions, evaluating cash conversion efficiency, and reprioritizing resources aligned to highest business value tech investments. In this blog post I will discuss some of the steps that CFOs and Boards can take now to prepare their businesses for the short-term and long-term future for value creation.

First, CFOs should revisit business unit assumptions for Gen Z demographic changes, supplier costs, labor shortages, business resilience drivers, and cyber risks in 2023 and beyond. By understanding current trends in each area, they can make more informed decisions about how to allocate resources today to maximize their chances of success in the future.

Second, Boards should oversee the senior management and evaluate each business unit’s Return on assets, cash conversion efficiency using direct cash-flow forecasting techniques and restructure cost base elements and growth priorities. This will help them identify areas where they may be losing out on profits due to inefficient processes or incorrect pricing structures. By making small changes now, CFOs can ensure that their businesses are running as efficiently as possible during uncertain times.

Thirdly, CFOs should consider reprioritizing their company’s cash resources away from underperforming or declining product or service areas. This will help them focus on what is working best in order to ensure that they are maximizing their profits over time. Additionally, it might be worth considering whether divestures, mergers and acquisitions could play a role in helping them reach their goals more quickly and with less effort.

Conclusion:

Planning for cash flow during soft-landing or hard-landing scenarios is an essential task for any corporate leader—especially a CFO and Board's Audit Chair ! By revisiting business unit assumptions, business fundamentals, operating models and evaluating earnings quality, cash conversion efficiency using direct cash-flow forecasting techniques, as well as by reprioritizing resources away from underperforming or declining products or services, CFOs and the corporate boards can ensure that their businesses are prepared for whatever comes next. Taking these steps now will help you set your company up for success even during difficult times!

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ABOUT KHWAJA SHAIK

KHWAJA SHAIK?is the award-winning C-level Global IT Executive with 25+ years of technology, industry, and board leadership with?IBM,?Bank of America?&?PwC. He was recognized globally for turning visionary thinking into breakthrough growth.?As one of?IBM’s CTOs, Khwaja counsels CEOs, Boards, and Startups on corporate strategy, digital transformation, AI, Cybersecurity, ESG, and culture shifts to unlock performance.

Using his innovative mindset, he saved $1.1 billion per year for Bank of America by transforming the Global IT Operating model and future-proofed business by mitigating risk and infusing new?fintech. Khwaja has 20 years of experience in the highly?regulated banking and financial services?industry.?

In addition, as a Big5 thought leader at?PwC, he incubated new businesses, reshaped business and?platform operating models— digitized end-to-end business processes to capture value, and protected firms from?cyberattacks?through AI & the cloud.

Khwaja has a history of leading over $10B digital business transformations by scaling Agile practices for cost optimization, revenue-generation, and societal transformation imperatives. It includes digital business optimization and using digital business models to capture profitable growth, customer lifetime value & competitive advantage to Fortune 500 firms.

Khwaja transformed the Omnichannel customer experience by delivering world's largest next-gen Contact Center platform as part of BAC's M&A (CFC, MBNA, Fleet etc.) by replacing aging telephony system with VoIP. Contact Center platform serves 1 billion calls, 500K interactions annually and 300 million outbound calls annually to support multichannel strategy

In 2016, Khwaja was among the most exceptional IBMers appointed with the rare distinction of IBM Academy of Technology member. In 2020, Khwaja was recognized as IBM’s senior inventor and top 100 technical leaders driving technology ethics and data stewardship, providing the direction of IBM on societal transformation with responsible innovation that matters.

Service to others has been a part of Khwaja’s purpose. Khwaja promotes economic equity, social responsibility, diversity, and inclusion for the prosperity of all -the reinvention of education through innovative programs such as Open P-TECH. Due to his holistic stakeholder engagement in the industry, partner ecosystem, and?community, Khwaja received several service awards from IBM, Bank of America, University of North Florida, Indo US Chamber of Commerce of Northeast Florida, and 2022 ORBIE Awards FloridaCIO Finalist.

Khwaja serves on the boards of directors of the?Museum of Science & History, UNF School of?Computing Advisory Board,?TECt,?MIT?CIO Forum,?Interfaith Center of Northeast Florida,?and McKinsey Executive Panel.

Khwaja regularly writes on?LinkedIn,?Twitter?and regularly?interviewed?for?industry insights?or cited in the?news,?Thought Leadership POVs. He is a frequent international speaker at elite universities, including IIT Hyderabad, CIO IT & Security Forum, MHI Supply Chain Conference, and JAX Chamber IT Council.

Khwaja is a Fellow of?Herndon Directors Institute, sponsored by?Nasdaq?and?Atlanta Life Insurance Company. Khwaja holds an MBA and a bachelor’s degree in Engineering. Khwaja lived on three continents, experienced three different cultures, reads too much, doesn’t do enough gardening, married for over 22 years, and has two boys.

?More details on Khwaja’s career and thought leadership activities could be found via?Linkedin,?Khwajashaik.com?or follow him on Twitter @Khwaja_Shaik

"The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions."