Collaboration between CIO and CFO has become an indispensable factor in achieving business goals. In recent years, due in part to the Covid-19 pandemic, business processes, especially in the Finance department, have been accelerating technologically at a much faster pace than in the past, and this has inevitably forced a revisiting of them.
In this context, the ability to maintain and gain market share is a reflection of the company’s ability to combine business needs with application responses. This can only be achieved if there is a close collaboration between the CIO and CFO capable of adding value to the business.
The importance of collaboration between CIO and CFO
As Sheri Rhodes, Chief Information Officer at Workday, also recently said, “Modernizing and automating financial operations is now one of the priority digital activities of today’s companies, in fact I would say it is the top priority. Collaboration between the CIO and CFO has become imperative to achieve business objectives.“
Of course, it is important to point out that not all companies operate in the same way, and in fact it is not uncommon to find situations where communication between the CIO and CFO is not perfectly transparent and where the communication model is unidirectional, one way or the other. In fact, a vertical division of departments, i.e., silos that do not communicate with each other adequately, continues to persist in many activities. In our experience in the field over the years, we have found communication difficulties in both SMEs and listed companies. Although this model allows the company to move forward, revisiting it with a view to greater synergy could allow for more beneficial and more successful results.
The risks of an absence of synergy
By now it seems clear that the absence of synergy between the CIO and CFO can undermine results and the achievement of business objectives. Although in some cases the CIO and CFO manage to arrive at a compromise that can satisfy both, in most cases what results is a clash between the two figures capable of wrecking the spirit of collaboration that is being sought.
In essence, analyzing the issue on a purely operational level, should the CIO and CFO fail to arrive at a close collaboration two possible scenarios will play out. The first sees a prevailing of the position advocated by the CIO, who will most likely go for one of the best technological solutions on the market. These solutions, although perfect for the technology project of the CIO and the consulting firms that support him in his activity, may not be able to adequately support the activity of Finance users, not meeting their needs. In fact, CIOs often tend to adopt solutions at the ERP and CPM level that favor the choice of the same vendor in an effort to seek integration that, if it is possible at the horizontal level, is not possible at the vertical level.
In the event that the CFO’s position prevails, it is easy to assume that the company adopts a solution that meets the needs of Finance users but lacks adequate integrations between the ERP and CPM levels with non-negligible effects at the TCO level of the solution. The collaborative process between the CIO and CFO must have a single goal: to choose a software capable of adapting to the business processes (perhaps revisited as a result of a BPR operation) while minimizing the TCO of the entire project. Faced with the complexity of this choice, it is necessary for the Chief Information Officer and the Chief Financial Officer to work synergistically in the interest of the company, free from possible constraints imposed from within or from outside companies.
The benefits of a collaboration between CIO and CFO
Very often when a company is faced with the choice of new software, it tries to prefer solutions that can guarantee high levels of integration so as to significantly reduce maintenance and interfacing costs. However, to date, as we explained earlier, there are no vendors offering truly integrated solutions between the CPM and ERP layers (vertical integration).
The issue changes if we analyze the situation from a “horizontal” perspective. In this sense, in fact, it is possible to find software that can adapt to process needs and at the same time manage to integrate optimally with each other. Integration, therefore, should not be sought on the vertical axis, but on the horizontal axis, and the real breakthrough in achieving business objectives lies in the collaboration between two key figures namely the CIO and the CFO.
The necessary requirements for successful collaboration
In the quest for synergy between the CIO and the CFO, for successful collaboration to be achieved, it is necessary for the relationship between the two figures to be based on certain prerequisites. Going into specifics, it is necessary for the CIO to be able to evaluate the best application solution, without making philosophical choices that often do not minimize project TCO or even meet business needs. On the other hand, the CFO must disengage from what is a user issue and move to a process issue.
In fact, very often it happens that users who have always worked with the same program become reluctant when considering an alternative solution. In fact, updating a software inevitably also implies a change in the way of working. Although new things can invariably generate fear and uncertainty, it is nevertheless of paramount importance to keep in mind that business processes over the years may have changed from what was analyzed in previous implementations. For this very reason, it is necessary to reevaluate the process and evaluate the software that best fits the new business needs. Within this framework at first process analysis and then comparison activity with the software turns out to be crucial. Remaining anchored to the patterns of the past in fact runs the risk of making choices that are not win-win for the company and of not seizing the opportunities that projects of this type are able to offer, thus missing an opportunity for growth and development.In essence, for a successful collaboration to take place between the CIO and the CFO, it is necessary for both to abandon the beliefs of what could be the advantages of their own office with the intention of adding value to the company. Through the right collaboration, the CFO and CIO will enable the company to continue to thrive in a rapidly changing marketplace that along with the associated risks, however, also offers great opportunities.