- CIOs can help CFOs by providing accurate and timely data for better insights, automating tasks and processes and mitigating enterprise risks.
- CFOs can help CIOs by clearly communicating business priorities, understanding IT costs and challenges and by helping their voice be heard by the board.
Chief financial officers (CFOs) have always worked with other leaders, such as chief information officers (CIOs) and external stakeholders to enable growth, support operations and manage risk. But under a constantly evolving business environment, CFOs and CIOs are expected to lead more agile finance and IT functions to support enterprise growth strategies. To accomplish this, the CFO must now understand where and how data and technology can be used, including enterprise resource planning (ERP) in the cloud, advanced data analytics, cybersecurity software and much more. In addition, CIOs also need to understand the ever-changing market, operational and employee expectations. In the EY DNA of CFO study, 74% of finance leaders acknowledge that technology is having a profound impact on the role of the CFO, and 96% see shifts in the data and technology functions. These advanced technologies are becoming increasingly important, but many CFOs are often caught off guard by this onslaught of technology. Collaborating with the CIO and understanding how technology can assist the CFO and business will lead to better outcomes for the organization.
This CIO-CFO collaboration remains a challenge; in a recent EY survey, nearly a quarter of CFOs feel they either have no effective collaboration or only limited collaboration with the CIO when compared to their other C-suite peers. CFOs state that they need help understanding various technologies and how technology can assist in driving growth and managing risks. Additionally, CFOs are continually trying to balance their priorities for short-term gains versus adding long-term value. This is where having a strong relationship with the CIO is crucial.
How the CIO enables the CFO
CIOs can help CFOs maximize value and minimize risk in three critical areas:
1. Provide better insights with data analytics
The CIO should work with the CFO to provide the analytics, reporting and visualization tools needed to make critical decisions. Through combining data from various systems across the organization, the CIO can help the CFO get a more complete picture of market demand and delve deeper into business operations. The CFO and CIO should constantly discuss how legacy systems are being used and funded, and whether they are ready to be retired, replaced or upgraded with a mindset of delivering timely, accurate data. This includes establishing an information strategy architecture to create a process for proper reporting.
2. Create efficient, agile and automated processes
Most finance organizations are inundated with manual tasks and are constantly moving from close to preparing for close. A partnership between finance and IT can help automate tasks, streamline financial processes and reduce the time spent on tactical work. CIOs can utilize their ecosystem of technology partners to help deploy emerging technologies to improve and automate processes. The CIO can provide a deep knowledge of emerging technologies, such as robotic process automation (RPA), document automation, machine learning and more to determine what will work best for the finance organization. By utilizing leading technology partners and platforms to supplement your organization’s know how, you can take advantage of the latest technologies without the need to create them in-house.
3. Manage enterprise risks, including cybersecurity
Cyber risk is top of mind for organizational leaders and boards. Cyber risk should be part of the wider enterprise risk management processes that CFOs already watch closely. CIOs can help by weighing in on the myriad of cyber risks the company may face, and gain input from the CEO, board or other technology leaders in the company as to what they are seeing in the market. These risks should be brought back to the CFO to discuss the most effective ways to mitigate them and keep enterprise and intellectual assets safe.
How the CFO can assist the CIO
While the CIO can help the CFO understand new and emerging technologies, the CFO can help the CIO understand the business strategy more clearly. Here are some other ways CFOs can partner with CIOs:
1. Business priorities
Many times, the CFO has good visibility into the organizational goals and objectives. CFOs can assist the CIO by articulating the KPIs and measures that will enable the organization to meet these goals. The CIO will then be able to develop ideas of how technology can assist the organization in successfully competing in the market. The CFO can also better explain value drivers for technology investment, so the CIO has a better understanding of how to make the strongest business case possible.
2. IT employees and operating models
CIOs are often frustrated with the tasks they are asked to carry out due to nearly flat budgets and conflicting business priorities. The CFO should be working with the CIO to understand these priorities and costs by being part of program executive steering committees. By participating in program approvals and steering committees, the CFO will understand the challenges and opportunities that are in front of the CIO and can assist in establishing priorities that align to organizational goals.
3. Amplifying their voice
While CIOs are the experts when it comes to IT operations, they may feel their voices are not echoed when setting company goals. CFOs can assist CIOs by making sure that their voices are heard when technology can be part of the solution. More and more companies are being challenged by competitors that have utilized technology to reduce costs or make a product more differentiated. Bringing the CIO to the table during critical strategy meetings may expose other leaders to how technology can help defend their competitive position.
Realizing the value of the CIO and CFO partnership
There has long been a disconnect between the IT and finance functions. But if CIOs can teach CFOs about how technology can assist in organizational goals, and CFOs can explain how to effectively focus IT investments that drive company objectives, a stronger synergy is forged.
Finance leaders who develop a working knowledge of IT can make better strategic business decisions and continue to push forward – and fund – their companies’ digital transformation. IT leaders with a greater understanding of financial priorities can properly assess buy-in for their initiatives with a greater perspective on the business’s short-term and long-term strategies.
For more information about how Ernst & Young LLP can help you unlock long-term value for your stakeholders and thought-provoking content for technology professionals visit ey.com/CIO.