Businesses are increasingly looking to finance to provide more effective decision support and strategic guidance, making digital investments an integral part of the CFO’s role. Many finance teams are using cloud-based solutions to automate standard processes, free up resources and generate insights that drive value for the wider business.
Articulating the business-wide benefits of a finance-specific digital investment can be challenging for many CFOs.
Reducing ‘days to close’ by automating manual processes does not necessarily sound like a big win to CEOs or board members. But being able to consolidate accounts faster and produce insightful management reports has the potential to drive immediate value for stakeholders across the business.
Traditionally, the dynamic between CFOs and CIOs has revolved around cost management. Technology investments have historically been capital intensive and prone to run over budget. But with technology now driving important operational efficiencies, this focus on cost is shifting. Organisations are starting to see technology investments as vital to their profitability. Nevertheless, many CFOs still struggle to gain buy-in for finance-specific investments. This is where closer collaboration with the CIO can be invaluable.
CFO/CIO collaboration: benefits throughout the investment process
CIOs are well versed in building robust business cases to show how the wider enterprise will benefit from digital investments. This experience can be invaluable in helping CFOs build their case to put to the CEO and/or the board. Beyond the business case itself, the CIO’s experience of articulating the broader business value of a specific systems investment can also help cut through the circuitous boardroom discussions that often take place around technology investments.
A closer working partnership between the CFO and the CIO will also bear fruit at other stages of the investment process:
- Evaluation: Many CFOs don't have the right experience to evaluate systems and vendors’ proposals effectively. Leveraging the CIO’s experience of vetting solutions and implementation partners can help the CFO make well-informed decisions in a crowded and confusing marketplace.
- Integration strategy: CIOs have overall responsibility for the business’s technology roadmap/strategy. To avoid integration issues, CFOs investing in a cloud-enabled ERP or analytics solution must be confident it fits with the organisation’s digital roadmap. Bringing CIOs into the conversation at an early stage reduces the chances of coming across compatibility issues during the implementation phase. Showing how a new finance system complements the wider systems architecture can also help alleviate concerns the CEO might have about the investment.
- Cost management: The upfront costs for a new system typically fall under the remit of the CIO. So do its operating costs and resourcing for the system. Transparency and collaboration between Finance and IT helps ensure that any systems Finance invests in can be successfully implemented and maintained.
- Big data/analytics: As organisations seek to exploit ‘big data’, C-Suite executives need to work more closely than ever to drive sound insight from the abundance of data now available to them. In fact, the challenges around data are top of mind for many CEOs. Data analytics and BI began life in the IT function. Leveraging IT’s expertise in this area can help CFOs who want to create ‘one version of the truth’ to support data interpretation within the business.