With the push toward digital transformation now in full swing, companies have begun to look at technology in new ways. However, just because the technology is going to be more user friendly or save money doesn’t mean that it’s going to be an easy sell throughout the organization.
As we discussed in our blog, getting IT and Finance on the same page is a challenge—albeit a rewarding one. If that was the argument on behalf of how the two can unite on a software project, consider this blog as an opportunity to leverage the momentum of a successful project to push for a much more stable, productive, and profitable effect: CFO/CIO Alignment.
The Current State of the Organization
Organizations today are moving faster than ever. With more competition, an expanding global footprint, and higher expectations from customers, the competitive landscape has pushed companies to adapt or die. Per a recent Oracle Study, Modern Finance: Driving Transformation from Within, when finance chiefs were asked about their goals and current situation:
- Nearly 40% of finance leaders admit the finance department is becoming more accountable for the business’ success
- 45% admit they are under increased pressure to raise productivity
- 44% say the company is placing more emphasis on driving business growth
- 41% say they are being asked to reduce operational costs
One such way that companies have approached these goals is to embrace technology, improve processes, and find the right people in every department.
With the success of the company on the line, and the role of technology in making this success happen, alignment between finance and technology is more important than ever.
Further, as companies look to forge ahead with new technologies in the coming years including artificial intelligence, robotic process automation, and Internet of Things, both of these entities will be working with one another even more frequently in coming years.
To address this, finance and IT professionals at all levels will need to speak a common language, share common goals, and have common values as time passes.
The Problem? Lack of Partnership
As discussed in a recent poll from Deloitte, there is a desperate need for the two entities to be on the same page, but fewer than one-third of respondents said the CFO and CIO at their company “share a strong partnership characterized by mutual understanding.”
With IT such a significant part of the company budget, and finance one of the biggest users of technology, it makes sense for these two entities to see eye to eye. 73% of finance leaders hope for increased CIO/CFO Alignment and it’s becoming clearer that the CIO will be a key player in driving finance transformation.
From Communication to Collaboration to Chemistry
A recent article from Digitalist Magazine explored the future of CIO/CFO Alignment, finding that there is not only opportunity, but a necessity—and successfully bringing the two leaders closer all starts with communication.
As we discussed in a recent blog, getting finance and IT on the same page requires that the two entities speak the same language—or can at least internalize the concerns of the other party. As one of the most cited barriers to connecting the two, finance chiefs lack understanding of the challenges and concerns of the IT Department. The corollary to this is that the CIO needs to be able to communicate in business terms, translating the importance of his or her expanding role to the rest of the C-Suite.
“CIOs often find the expectations of CFOs to be unrealistic, stemming from a lack of awareness of the realities of managing and implementing technology at large organizations and a lack of understanding of the technology itself. Make sure to clarify what is hype and what is reality to establish reasonable expectations of technology and effectively align IT with business strategy and timelines.”
For the CIO to drive forward his or her own points, a 2013 Wall Street Journal Article discussed some communication imperatives. Following are ways CIOs can help improve communication with CFOs:
- Use business analysts to act as interpreters between IT and the finance function and business units.
- Assign business technology leaders to each business unit and function, such as finance, to serve as liaisons.
- Establish rotational assignments through IT and finance to help improve cross-functional understanding and communication.
- Put in writing what’s working and what’s not. Transparency can serve CIOs and CFOs in their communications.
As technology becomes more important and new generations enter the workforce, the CIO has taken on new responsibilities, gained a bigger voice, and has become everything from chief integration officer to chief innovation officer. For more information of the expanding role of the CIO, we highly recommend the Future of CIO blog, part of our CIO Reading List.
As the two edge closer together, the CIO and CFO need to move beyond talking build a relationship in which they set goals, consider the other’s role in the business, and work together to complete projects.
The CFO needs to have IT involved in entire projects—from beginning to end—and this involvement needs to occur on a regular basis. As the relationship moves from project-driven to strategic, the two can begin empathizing and seeing that the two have the same goals: “to ensure that the current business operations are running efficiently and effectively while helping shape the strategy for future growth and stability.”
With the two seeing eye to eye, it’s time that the two begin leveraging this as they push the organization forward. The future of the boardroom will see the setting of many goals and an increasing overlap of responsibilities. By considering each other’s’ needs, goals, and aspirations for the company, CFOs and CIOs can establish the mutual understanding needed to give each other necessary support and build an effective relationship.
The Future of the Boardroom
As the technological and financial landscape changes, connecting the CIO and the CFO will not be the only indicator of success. This is only the first step to better information, more collaboration, and an improved strategy. From here, one can expect that the CMO, CHRO, and others will begin to work more closely with IT and Finance to build lasting relationships and lead the strategy of the organization.
As a technological arm within one of the leading accounting firms in the nation, Wipfli/Brittenford knows a thing or two about the convergence of finance and IT. From CIO Advisory to the implementation and support of ERP and other applications, we would love to discuss with you the challenges and opportunities that exist as you lead the charge at your organization. Contact us to learn more.