Sriram Padmanabhan, Head of Banking & Financial Services, NIIT Technologies
In order for both the CFO and CIO to be effective members of their organizations, it is important that they work together to identify the best possible solutions for financial teams. CFOs can look to the CIOs knowledge of a company’s technological systems in order to continue to develop best practices for finance teams everywhere.
Not long ago, a CFO’s job description was straightforward: he or she was the caretaker of the company’s finances. The CIO’s job, on the other hand, was to figure out how to get budgets passed by the CFO.
But now, a CFO is an integral part of the strategic executive team. He/she is expected to make recommendations fundamental to the firm’s growth, profitability and existence – but is also expected to base each recommendation in extensively analyzed data. Which, of course, used to be the exclusive preserve of the CIO.
There are two ways of playing these roles now, given the overlap in responsibilities. The CFO and the CIO can either constantly lock horns over ownership of data and decisions, or they can establish a true partnership, complementing each other to maximize organizational business value.
Here are a few ways in which the CFOs and CIOs can optimize their partnership:
• Understand what CIOs can offer and what they will need–CIOs control a vast amount of organizational information. Finance executives should understand the breadth of information available within the company, whether it is analytics engines, business intelligence applications, data warehouses, customer portals, CRM systems or transaction processing mainframes. At the same time, CIOs should collaborate with financial teams to understand what reports and information is needed for decision making – so that executives are not overwhelmed with unnecessary information.
The CFO and the CIO can establish a true partnership, complementing each other to maximize organizational business value
With mission-critical information readily available, companies can make it much simpler to drive overall productivity, and thus increase operational efficiency. Additionally, CIOs should work with CFOs to have them use the best and most effective technological tools and provide a clear overview of how these technological tools can be particularly effective.
• Collaborate to determine what systems need to be updated–Automation and digitization are becoming table stakes to be viable in today’s business world and companies that have not already made the transition will do so soon. However, organizations will need to update their technology prior to automating any of their systems. ‘Paying technology debt’, or making sure that the company’s infrastructure is current, will be the first step to reducing technology risk and allowing for smooth business operations. With technology becoming so crucial to business success, the CFO can no longer afford to treat this as a “CIO Problem” anymore.
• Business Process Optimization–Organizations will need to optimize their business process models prior to automating any of their systems. A process that has worked like a charm from the 1980s is probably no longer the most efficient or effective way of working in the new digital world. There are smarter ways to connect with customers, to sell more, collaborate with partners and employees, comply with regulations, and control costs. This makes it a CFO concern: but business process remodeling and automation is a technology project, too, making it a classic case for collaboration between the CFO and the CIO.
• Identify industry trends–Both CFOs and CIOs will look at the industry with slightly different points of view. Alone, neither one should shape the company’s business strategy. Instead, CFOs and CIOs should team up to discuss the trends each is seeing and the impact it is having on the business before making recommendations. The industry evolution should include the most up-to-date technology and financial trends. It is important that CFOs have insight into the technology trends while CIOs need to understand the business implications. The role of the CIO may be particularly effective in this case, as he or she can help provide a more detailed analysis of ongoing trends and provide in-depth insight as to how these trends relate to overall views. Finally, providing this in-depth view will help CFOs remain committed to their goals while incorporating novel outside ideas.
It is important for CFOs and other financial executives to continue minimizing the cost of managing business functions while also focusing on overall process standardization and developing a specialized skill set for their respective organizations. CIOs can be an important and vital part of this business transformation, but they will need to plan to appropriately work with their CFO counterparts to do so ultimately, the relationship between these two can directly affect a company’s success and can help to continuously provide unique and compelling ideas.