This article was first published in the July/August 2016 UK edition of Accounting and Business magazine.

An exciting time to be a CFO? Of course it is, says Naomi Hill, vice president of finance and CFO of IBM UK and Ireland. Part of the excitement is derived from the breadth and reach of the job, where the CFO role reaches out across the whole spectrum of the organisation and interacts with all the other leaders in the business: marketing, HR, IT and sales, as well as the CEO. ‘With the technology changes and advances – and this is relevant to all CFOs – every day we have new opportunities to use data,’ says Hill.

Data, according to IBM, is the world’s new natural resource. ‘Leveraging data we can interpret and use to model new understandings brings additional value into the business,’ says Hill. IBM sees data as transforming decision-making, and that is having an impact on the role of the CFO. This transition is spurred on by the rate of technology change. For instance, it is creating a business environment where industries are converging. An example is online retailers linking up with bricks-and-mortar grocery chains. Innovative technology is allowing new competitors to enter markets as barriers tumble – consider the impact of Uber on the taxi business or Airbnb on accommodation and leisure, for example. (See box on IBM’s CFO survey from its Institute for Business Value.) ‘The top line is that CFOs will continue to need to spur innovation as well as react to it, that digital will dominate relationships with clients, pushing us to collaborate in new ways with customers and suppliers,’ Hill says.

In post for just under three years, Hill describes herself as the financial steward of the company. But she is much more than just that. She is an adviser to the business, leveraging technology and information in order to provide business insight. With her finance teams, Hill works alongside the IBM general management, providing financial expertise to the business. This extends to collaborating with IBM finance colleagues around the world.

Hill cites a host of areas where she has broad responsibility and oversight – accounting, tax, treasury, statutory accounting, acquisitions and divestitures – which all help to inform and establish the company and financial strategy. 

Company in transition

And that strategy has changed. Still a leading, global technology player, IBM is a company in transition, focusing on strategic imperatives – cloud computing, mobile, analytics, social and security – rather than its older hardware, software and services businesses. Such a transition has weighed on results, but IBM insists it manages for the long term and the investment is paying off.

That investment covers every part of the business. Building skills in the finance team ensures that the company can benefit from technical accounting expertise as well as the broader business insight. IBM operates a single finance model globally, deploying a mix of centralised and decentralised teams. Some are clustered in centres of excellence, which aim to benefit from economies of scale and commonality of interest; taxation, treasury, management and statutory reporting are examples. As well as using those, Hill can also call upon local teams in the UK that analyse information and use tools such as predictive analytics to directly support and advise the business through detailing and establishing trends emerging from the market place. Predictive analytics is statistical analysis that makes use of historic data to provide an accurate benchmark for predicting future activity. And it is of major interest to IBM in driving its business and working with its customers.

Geography is of little import to finance; the teams could be local or global, they could be virtual, wherever and however it makes sense to operate and leverage the skills required. Beneath the CFO, IBM has divisional CFOs working in the main area of the business. ‘We have been evolving that model; the technological advances and the transformation we’re going through enable us to establish these ways of working but we continually look at the model to see where the best place is to get those skills,’ Hill says. 

An example of change from Hill’s direct experience is in a former role as treasury manager in Portsmouth. The treasury team’s roles included working on leasing deals, arranging financing for customers and interacting with the banks. Now, the treasury function for IBM is centrally located, providing services to all the territories rather than establishing an individual treasury in each country or region. As well as finance working in specialist teams, Hill has financial professionals whose role is to sit alongside the business, providing direct and immediate business analysis, interaction, advice and guidance.

Beyond score-keeping

Skills is a topic that crops up time and again – having them and keeping them up to date. Only by maintaining those skills can finance help to drive business value and insight. Hill says that as the IBM finance teams become more skilled – in terms of technology, marketplace, industry knowledge – it enables ‘amazing opportunities for the CFO to move beyond the role of scorekeeper to adding value and shaping the company’.

As a qualified banker, not a professional accountant, in the CFO role, Hill is clear that IBM encourages professional qualifications of all types, across all areas of the business. ‘One thing is certain: a strong accounting technical background is very important for a CFO, and all financial professional qualifications teach that,’ she says. ‘When I did my chartered qualification, it was in the context of the banking industry and I brought all that experience and knowledge with me to IBM. In finance we value that accounting knowledge as the bedrock of everything we do today. I use it every day as well as relying on others’ expertise.’

She also notes how qualifications such as ACCA go far beyond the accounting core to touch other areas – such as leadership, business insight and change management – which matter to IBM. ‘Professional qualifications support the requirements of the finance function in the modern world,’ she says – and that includes making a key contribution to IBM. Hill says that the key performance indicator (KPI) for the function is ‘E to R productivity’ – expense to revenue. ‘Is the amount of money we are spending on the finance team in line with the revenue of the business?’ She may have asked the question, but Hill wasn’t giving away anything on the trend of that KPI, nor did she comment on the state of the US Securities and Exchange Commission’s (SEC) investigation into IBM over revenue recognition relating to some transactions that took place in the US, UK and Ireland, which the company disclosed last October. IBM did confirm that it is cooperating with the SEC in this matter.

Breadth of opportunity

When asked whether as a woman she had to work harder or try harder to gain such a senior position she replies: ‘Really, in IBM, not at all.’ Perhaps her response is given extra weight by the fact that the CEO and president Ginni Rometty is also a woman. Growing up for some years in Virginia in the US, Hill says that she wanted to return to the US and was interested by global corporations. ‘Working in the technology space, I love the challenge of the transformation, the breadth of roles, and IBM offers the opportunity to move into different roles,’ she says. ‘My background has been fairly traditional – moving up a career path across brands and territories. But for future finance leaders, as IBM becomes a globally integrated enterprise, there will be greater opportunities to move in and out of finance, into the business, into operational, sales and consulting roles.’

Operating in 170 countries, IBM is, says Hill, a company that looks to continuously transform and innovate, providing solutions to support a vast, diverse client base, tackling their most critical business challenges. The future for IBM is digital intelligence, and it sees the next decade as a dawn of a new era. Even though IBM does not break out its revenues along country lines, Hill is clear that the UK and Ireland contributes significantly to the company’s overall performance. IBM continues to invest in this region; it has built a ‘SoftLayer’ cloud data centre in the UK as part of a US$1.2bn investment in expanding its global cloud footprint, while the IBM London analytics centre puts the UK centre stage in one of its strategic imperatives: to use advanced analytics expertise to address the complex business challenges facing clients. 

Perhaps the most public face of that technology for IBM is its association since 1990 with the Wimbledon tennis championship, where it provides scores, statistics and analysis of matches through its Slamtracker. Less high profile, but perhaps even more important than keeping track of Andy Murray’s progress, anyone completing an online transaction or using a cash machine does so using IBM software developed in Hursley Park in Hampshire.

Such developments are evidence of IBM’s high ambition to be at the forefront of a new era of cognitive computing. And to help achieve that, Hill’s desire is to continue creating a smarter finance function.

Peter Williams, journalist