CIOs and CFOs each play a major role in transformation projects within their organisations, but they often lack the unity of approach to make a complete success of their endeavours. Because the most effective transformations will have an impact on – and require input from – the entire enterprise, it’s critical that the project is planned and implemented holistically.
Partnerships between departments will be essential, but close collaboration between the CIO and CFO has the power to make finance transformation reach its full potential, and have sustained, long-lasting impact.
Both executives have traditionally had very different roles. Those roles have often been siloed in their respective departments, but the changing nature of business has rewritten both job descriptions. As operations have become increasingly data-and-technology-dependent, CIOs have been called upon to apply their expertise across the enterprise and to have a deeper appreciation of the financial implications of their activities.
CFOs, meanwhile, have become custodians of comprehensive digital accounts of transactional data which, when combined with new analytics tools, means they’re uniquely positioned to provide business insight and intelligence. It’s no surprise then that they have begun to play a more strategic role in planning the enterprise’s future.
This evolution is being appreciated by senior finance executives. “What we’re seeing is that finance leaders are starting to put themselves on more courses to understand how new technologies are having an impact on finance,” says David Hammel, SystemsAccountants Managing Director.
While acquiring new digital skillsets can have an impact for today’s CFOs, by partnering more closely with the technology and information function, they can amplify their reach and drive meaningful change within the business.
No transformation without collaboration
Increasingly in the day-to-day operations of modern, digital business, each department relies on the skills of the others. All functions tend to be run on IT systems that must be incorporated within broader tech strategies that are drawn up on an enterprise-wide basis. Transformations, though more intense in their target timeframes, budgets and execution programmes – need the same kind of joined-up approach.
There will be some division of labour: The CIO will have the expertise to select the products and systems required for the project and the CFO will ensure that what’s proposed is strategically right for the organisation before signing off on the financing.
But together, CIOs and CFOs can provide the cohesion and oversight that maintains the project’s momentum along its planned path. They can forge a shared language that will help win early buy-in from the board and other stakeholders – especially change-averse frontline staff – and they can also more effectively agree on, and guide, an execution plan.
As a team they can provide checks and balances that can reduce the likelihood of potentially dangerous overreach. Importantly, they can also bring greater agility to the execution phase; few large-scale projects are achieved without hiccups, and when unified in purpose and ambition, CIOs and CFOs can summon their combined strategic forces to react more quickly and effectively to unexpected hurdles.
To read more about how to assemble an expert team and have the right people in place at every stage of the transformation journey, read The Digital Finance Transformation Talent Guide.
The benefit of collaboration
Research, both statistical and anecdotal, shows that partnerships work. A study by Gartner found that projects helmed jointly were 51% more likely to win funding approval. Also, 39% were more likely to stay within budget and 18% more likely to achieve their objectives.
“Our transformation would not have been completed on time or within budget had we not had that level of collaboration between the CIO and CFO,” said Shaun Perkins, Group Finance Director at podcast production company AudioBoom, which recently replaced its entire accounting processes with a single software-based cloud-based digital solution.
The project required the migration of $80 million-worth of accounts data, but the finance team was given just three months to complete the task.
“Without coordination ahead of implementation, it would have gone over budget because we’d have needed external people to come and do it in the timeframe needed,” Perkins added. “That time, when you’re selecting all those external vendors, is time wasted in the project. So, it would have overrun and we’d have been looking at a mid-year change of the accounts system, which is not ideal.”
A potent legacy
Collaboration between the CIO and CFO can mean the difference between a transformation succeeding and failing. Without that level of partnership from the earliest planning stage of the project, funding may be harder to obtain, progress may be slower, and targets can be missed. This can all add operational drag, increase costs, and lead to missed business opportunities.
But through the sharing of each leader’s skills and knowledge, the benefits can go well beyond the successful implementation of a transformation plan. The collaborative effort can be applied to day-to-day business, cementing operational cost savings, fortifying against risks that are yet to emerge and surfacing value-adding and revenue-generating ideas.