The cloud puts the spotlight on the need for a strong finance-IT relationship
To succeed in their expanded role as a strategic business partner, senior finance executives need to develop strong relationships with their executive counterparts across the organization, particularly with IT leaders. The CFO and CIO need to work closely to drive digital transformation initiatives that update legacy on-premise systems, increase business agility, improve business processes, and ultimately fuel growth.
Digital transformation is a critical component to supporting all stakeholders, from board-level decision-making to day-to-day business processes.
While their roles are intertwined, there is a bit of a disconnect when it comes to the CIO-CFO relationship. They need one another to propel their organizations forward, but they can sometimes be at odds. According to a Forbes Insight Report, nearly all of respondents (96%) say that CFO and CIO collaboration is critical. However, most (89%) say there are significant barriers that prevent such cooperation.
The primary strains on the CFO-CIO relationship center around cost control and budgeting. CIOs sometimes struggle with communicating the ROI of IT projects, as well as priorities and costs. With their eyes on the financial health of the organization, CFOs expect CIOs to present a clear business case for investments.
The fluid nature of the cloud also adds complexity to the CFO-CIO relationship. The transition to the cloud involves a shift in IT spending and budgeting processes, so the finance and IT teams have to learn how to speak the language of their collaborators. Research reveals that CFOs’ insufficient understanding of IT issues is the primary barrier in their relationship with CIOs.
The stakes are high when it comes to the CFO-CIO partnering to deliver a successful digital transformation. APQC’s Process and Performance Management Challenges and Priorities survey revealed 75% of participants reported undergoing digital transformations to leverage technologies for efficiencies and improve the customer experience. The top drivers of enterprise digital transformation were building efficiencies through process automation, improving the customer experience, and enabling better data management.
Modern organizations recognize that a strong CFO-CIO partnership is key to the future. According to The Hackett Group’s 2019 Key Issues Study, a significant majority of finance executives firmly believe that digital transformation will have an outsized impact on the future of the finance function in the next two to three years, with 86% anticipating a boost in financial performance.
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