Chips with everything

Back in 1965, Intel-founder Gordon Moore wrote about his vision for the likely progress of the humble silicon chip. He believed that it would double in power every two years and cost less each time. He further predicted that chips would be put to work in a multitude of devices – with applications in homes, cars and even “personal portable communications equipment” – and that this growth would be self-propelling. He was right. For some time now technologists have referred to this exponential phenomenon as ‘Moore’s Law’.

The dimensions of silicon chips have shrunk to almost virus-like size and their use expanded to almost every conceivable walk of life. But a recent article in the much-respected Nature magazine suggested that the viability of Moore’s Law is nearing its end; scientists have pushed the limits of what is feasible and that the real creativity must start now.

According to a report by McKinsey and Co, up to 40% of the global productivity growth during the last two decades has been put down to the expansion of technologies made possible by chip performance and price. Tiny chips have been squeezed onto minute circuits and we have all benefited from this progress in one way or another. But the heat that is unavoidably generated by cramming so many hyperactive chips onto a tiny circuit means manufacturers have hit a practical and economic wall. And despite extensive research efforts, Nature states that “there is no obvious successor to today’s silicon technology”. McKinsey’s report concludes that reducing the size of transistors even further will – because of the tools needed to fabricate them – make chip design up to 50% more expensive. But this is not a problem.

Why? Large and powerful computers for individual use are no longer necessary. In today’s on-the-go world we use multiple mobile devices that we carry, wear or that are embedded into just about every device we own. As Nature points out, raw computing power is simply not needed for general use because “most of the processing and data storage is done in the cloud…rather than on the device itself”.

This is as true for the corporate treasurer as it is for other technology users, even if the pace of change may not seem quite so hectic. But consider how far processing speed has advanced in the past few years, how hyper-speed global connectivity is enabling companies to check positions at a moment’s notice, and how data analysis and presentation tools have enabled rapid response times that just a few years ago would have been impossible. Consider too how cloud storage and processing has taken the strain from internal teams and how it has made vast computing power available to so many more. And think about the security and peace of mind that distributed ledgers can bring: blockchain is definitely not a gimmick anymore and even ‘old school’ treasurers can be part of the story now as it feeds into areas such as trade finance and payments.

Moore’s Law may have reached its peak but now it is time to see just how far all that speed and power can really go.

In this Treasury Today Best Practice Handbook, ‘The Treasurer’s Guide to Digitisation’, we look at some of the inventive products of computing science through a treasury lens. We consider how the technologies utilised to deliver so much in the way of time, space and cost efficiencies, in such a short time, have become commonplace to the extent that many justifiably take this progress for granted.

Indeed, the democratising effect of technology is clear to many. But for the cynic, even the apparent tyranny of ‘being in the office when you are out’ has enabled a different way of working that can blend in with modern lifestyles if it is managed sympathetically.

In viewing the digital world of treasury under the microscope in this way, it becomes apparent that resisting progress, at least for a large and complex business, is a risk in itself. For the majority though, the need is simply to be aware of what is available and to ask how such offerings might help their organisations to thrive in a complex and volatile world.

By working through the checklists, interviews and case studies included within this Handbook it will hopefully assist treasurers in understanding what technology can and can’t do, to see and manage the risks, and to place the tools available today in the context of what might be available in the future as the new creative surge rises. We hope, in some small way, to help readers appreciate and prepare for a world that would perhaps surprise even Moore himself.