This is the third of three articles on the CFO’s growing role as chief risk officer. Part 1 made the case for that role, and part 2 showed how to plan beyond a single-number forecast. This article offers a routine for the known uncertainties that remain outside the numbers and can leave even a sound forecast exposed
AI is moving beyond software
Tech giants are committing trillions of dollars to AI infrastructure, while Anthropic is introducing new transparency and usage-monitoring capabilities. Google is testing AI computing in space, and emerging technologies are exploring digital smell and silent communication. These developments highlight the growing scale of AI investment, its expanding applications, and the increasing importance of measuring its business value.
A simple analysis can help keep your business’s key initiatives focused on your highest return area.
You have set the budget, agreed on initiatives and even have a long term plan. But how can you validate your company is on the right track?
People who are highly sensitive to the lack of flexibility of traditional budgeting often see rolling forecasts as the answer. If we update our view of the future more frequently and don’t confine it to the financial year it is obvious that this will be more useful than traditional annual budgets based on the financial year.
So, you might think, forecasts are like budgets but done more frequently – right?
How many times have you heard somebody say, “Banks only lend to companies who don’t need the money?” I have heard that comment frequently during my career. Now, with the benefit of hindsight, I realize it was those companies who valued their banking relationships and were always prepared to talk to the bank who received the funding. The first step in building a solid bank relationship is to value what a bank can mean for you. Many executives still view a bank as a vendor, selling money, rather than a partner, providing ideas and solutions to improve their business. If you have chosen your banker wisely they will have the experience, tools and contacts that can be invaluable to a business that doesn’t have an unlimited budget for consulting expertise.
If you still don’t think your banking relationship is critical here are some more reasons executives should maintain a good working relationship with their bank.
