In the international sense, the role of the Chief Financial Officer (CFO) which in some business quarters, stakeholders refer to as the Financial Director (FD), is gradually changing. Many transformations are taking place in this field. Among the reasons for it are the impact of digital and social media, the rise of big data, the global financial crisis that took place, and the impact of Internet of Things (IoT) and blockchain (Simister, 2007 and Linnhoff-Popien, 2017). Traditionally, the role of the CFO regarded the tracking of regulatory trends, analysis of expenses, management of investments, insurance, and credit management, and the engagement, supervisory, and management of finances (Simister, 2007). They were significant tasks. The ever-evolving technology continues to change, and business leaders must adapt to it to remain successful and relevant. CFOs currently focus on strategy. According to Simister (2007) and S A B & Umamakeswari (2018), they are taking in a broader approach of leadership in business in the 21st century than they used to do before. Gradually, they are adopting the roles that traditionally belong to the chief executive officer (CEO).
Many studies regarding the changing roles of CFOs and the impact of blockchain and IoT show that CFOs are quickly becoming an integral part of the business (Berg-Cross & Arbor, 2016 and Wang & Zhang, 2015). Contrary to before, CFOs currently engage actively in decision-making related to investment and emerging technologies in organizations. There is a reason to believe that with time, the role that CFOs play will grow. They develop and implement effective strategies for management of businesses and ensure that all the decisions are positive to the finances of the firm. This broader scope of the function of CFOs puts pressure on them to comprehend every aspect of business operations above its finances. They must fathom the broad business functions such as marketing, production, hiring and recruitment, and sales, among many others. With the rise of IoT and blockchain, CFOs are quickly learning.
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"How The Internet Of Things (IoT) And Blockchain Are Changing The Shipping Industry".
The technology provides faster solutions than before, reducing business risks, and providing effective solutions from the financial standpoint. The technology provides a new dimension of data to avoid fraudulent activities that may deter business progress. The technological solutions (specifically IoT and blockchain) are the key factors that will allow CFOs to take up another role in their ever-evolving roles in business. The increasing automation and emerging technologies enable CFOs to reduce their mechanical burden. It will help the business leaders to focus on adding value through strategic direction and creative innovation and move the business forward.
Internet of Things (IoT) and Blockchain and their influence on CFOs
Internet of Things (IoT) refers to the network of physical devices home appliances, vehicles, and many other electronics which become embedded with connectivity, actuators, sensors, software, and electronics and enable them to both connect and exchange data (Cope & Kalantzis, 2009). The result is a creation of opportunities that integrate the physical world with computer-based systems (Cope & Kalantzis, 2009). The consequences of it include reduced human intervention, economic benefits, and efficient improvements. According to Berg-Cross & Arbor (2016), there are over 9 billion of IoT devices in the global society, a figure that statistics show will increase gradually to be worth over $7.1 trillion by 2020. A blockchain refers to the growing list of records with a secure link and use of cryptography (O’Dair & Beaven, 2017). The records are the blocks. Each block contains cryptographic hash which is a timestamp and transaction data (S A B & Umamakeswari, 2018 and Malviya, 2016). The design of a blockchain makes it resistant to data modification. However, it is distributed ledger that records transactions between two or more parties verifiably and permanently (Malviya, 2016). The management of a blockchain occurs through a peer-to-peer network that collectively adheres to the inter-node protocol communication, validating all new blocks in the process.
The link between IoT and blockchain comes through consideration of security issues. It is a fact that IoT is insecure. However, the technology involved in the development of blockchain is secure and useful in making IoT secure. According to Malviya (2016), there can be IoT-blockchain connections in multiple of ways, making IoT secure. The technology can build trust, reduce costs, accelerate data exchanges, and scale up security. It is in this school of thought that following the continuous evolution of the role of CFOs in organizations, this form of technology can revolutionize the viewing and access of financial information for CFOs in the near future. The link between the two will open new possibilities for organizations, regulators, standards-setters, and industry bodies by 2030 (Cocco, Pinna, & Marchesi, 2017). It will enable CFOs to act on and view financial information that the shared ledgers store. CFOs will gain substantially, particularly on execution. The technology will make financial information risk-free and available.
Future of CFOs with the Internet of Things (IoT) and Blockchain in the Shipping Industry
Blockchain evolved from a form of technology that is associated with bitcoin transactions. Shipping companies are gradually adopting it. It holds a distributed ledger in blocks in a secure manner. With the connections that IoT will provide, the link of the two technologies will have immense significance for CFOs in the shipping industry in the future. It will reduce the amount of documentation throughout the supply chain and allow for secure and real-time access. According to Malviya (2016), it will also allow customers to understand the process of the supply chain better. It will simplify the exchange of financial documents by the relevant CFOs in shipping companies. Among the documents that CFOs have to regard include vessel manifest, customs declarations, bill of loading, and certificates of origin, among many others, that the technology will simplify.
Shipping regulators, companies, distributors, and relevant financial specialists will be able to access information through their applications (Linnhoff-Popien, 2017). In this school of thought, blockchain will simplify financial transactions in the shipping industry. Most shipping companies take advantage of digital technology in financial transactions, combining the use of payment processes and smart contracts to speed up transactions. CFOs use algorithms that verify the digital signatures as well as the shipping services. The digital technology evaluates the payments of smart contracts and automatically send payments to shippers, distributors, and manufactures. O’Dair & Beaven (2017) say that by 2030, all shipping companies will be using it even though the contemporary usage of this technology is low.
Another way through which blockchain technology, together with IoT will affect the shipping industry is by improving the quality of delivery. In many cases, shippers damage or lose materials in the process of transportation. It affects the trust that customers have with the liner of the shipping company. Blockchain has effective asset management for customers and offers an increase in transparency. In the future, customers will be able to review the information blockchain and every transaction in the company (Wang & Zhang, 2015). They will be able to check the certificate of the manufacturer and ensure that the quality of materials is high. Through the technology, customers will also review documentation in the logistics chain and track down all the information. The final way that the shipping industry will gain through the technology is enhancing the liner shipping operations to be up-to-date with the international market. Many shipping companies in the global economy continue to take a stance, and liner shipping industries seek solutions to make their operations scalable and efficient.
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