“My greatest joy is having IT software and systems that make great datasets available promptly,” said Redgate Software CFO Steve Mitchell last year in our Finance & Accounting Technology Briefing.
Mitchell was not only opining about his internal finance systems but was also speaking on behalf of his customers. As a database management tools provider, UK-based Redgate is at the center of the unprecedented demand by businesses for faster, easier, broader and, yes, cheaper access to operational and financial data.
We asked Mitchell how global economic uncertainty, the rapid pace of AI investment and international compliance requirements are forcing tech organizations and their CFOs to pivot quickly.
What new challenges are you facing in your sector?
One significant challenge is the increased global economic and political uncertainty. While this isn’t new, it has intensified recently, making long-term investment decisions more difficult and raising capital more expensive. Despite this, it does present us with some commercial opportunities.
By demonstrating the solid and quick return on investment that potential customers can expect from using our products, we can accelerate growth. For Redgate, that means focusing marketing campaigns on the cost reductions our database-related software can deliver, alongside improved database performance and security.
Another key challenge is the accelerating pace of technological change, particularly with regard to AI. Technologies that were expected to be three to four years away at the start of 2024 are already here. This rapid advancement prompts us to identify the most effective places to invest our money and effort.
Shortages in key skills, heightened information security threats and accelerated regulatory requirements are both risks and opportunities for tech companies.
How do tech companies adapt to rapid market changes and technological advancements?
It’s all about building flexibility into your capital structure and decision-making processes. This flexibility enables you to respond quickly to changes and potentially drive those changes yourself. Moreover, leveraging data with the fantastic tools available today, including AI, is essential. In many cases, inaction is the most significant risk.
How do you balance that with the need to keep pace with evolving regulatory and compliance requirements?
The General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States have established high standards for data privacy and protection. These regulations ensure that consumers have greater control over their personal data and impose significant penalties for non-compliance.
More about Steve Mitchell and Redgate Software
- Company sector: Database management tools
- Headquarters: Cambridge, UK; U.S. offices in Austin and Jersey City, New Jersey
- Mitchell’s first CFO job: 2014
- Notable prior companies: T-Mobile, eir Ireland, Six Degrees Group
Prioritizing investment in compliance and regulation areas can be challenging. However, companies must address it to avoid damage to their brand from information security breaches or poor ESG practices.
As CFOs, we can prepare our CEOs by examining regulatory and compliance requirements through three lenses: legal obligations, business improvements and customer expectations. Identifying initiatives that align with all three makes it easier for CEOs to justify increased spending, so that the organization views it as an investment for growth rather than a mere compliance cost.
Data is quickly becoming a top priority and asset for organizations of all sizes. How does that change how CFOs not only leverage data in decision-making but also establish effective data management processes?
Data, alongside people, has become one of the most important assets. Those best able to leverage their data are making faster, better decisions.
But every business struggles to some extent with the availability and quality of data. The CFO has to ensure the organization doesn’t become paralyzed by imperfect data. Often, data that is 80 percent to 99 percent accurate is sufficient to drive decisions and set directions; the cost of indecision and inaction is often higher than [the cost of] using slightly imperfect data.
CFOs should model the ability to make strategic decisions with imperfect data and encourage others to do the same. The quest for a perfect data warehouse can be counter-productive; a dose of pragmatism can accelerate decision-making.
The other imperative? Data security. As more people across a business use data to drive decisions, they naturally request more access. CFOs need to define and control processes for data access, usage, storage and deletion. AI adds to the complexity of this, as dataset access requests for training models or integrating new AI-enabled software will increase exponentially.
In the context of ever-changing external risks and growing internal demand for data access, CFOs must ensure that their businesses invest in information security, appropriate expertise, systems, policies and processes.
