Given the central role that technology plays in supporting modern businesses — and their finance functions — the chief financial officer and the chief information officer (CIO) need to form a productive partnership.
Here are just three reasons the CFO should strive to build a strong relationship with the CIO.
1. Smarter investments in IT
Whether the business needs to implement an enterprise resource planning system that will be used company-wide or a Software-as-a-Service solution that’s for the finance function alone, the CIO can provide expert guidance to the CFO on which technology will help the company achieve its strategic goals and increase competitiveness.
In discussions with technology service providers, the CIO can help to ensure that the CFO and other key executives ask the right questions and get the information needed to make IT investments that will deliver the desired return. The CIO can also offer insight as to whether the business should purchase a new system, or simply update or optimize an existing one.
2. Information security and compliance
When it comes to data security, the CFO can look to the CIO for help on many fronts, including creating access policies and answering questions that the board of directors may have about the company’s approach to cybersecurity. Hacking and other cyber threats are serious and ongoing concerns for almost any business today, and cybercriminal activity has been on the rise.
The risk of data theft or loss — as well as potential compliance violations related to information security — is only heightened as organizations become increasingly reliant on technology for everyday business operations. Social media, as an example, can disrupt financial reporting standards. There is a case to be made, however, that some innovations, like cloud computing, can actually help improve security.
3. Data analytics
Organizations of all sizes are working to find ways to turn their data into actionable business intelligence. In fact, finance teams are among the business groups most eager to embrace new data analytics tools and learn related skill sets.
Of course, the CFO and other executives want to be sure that only the most relevant and accurate data is used for decision making. This requires the business to apply the right combination of technologies, processes and strategies. Enter the CIO: A McKinsey & Company article asserts that the CIO and other IT leaders “are well equipped to lead and shape these activities” and “help companies raise their game on how they use data and analytics for competitive advantage.”
These are only a few areas where effective collaboration between the CFO and CIO can have a positive impact on the business. By developing a solid working relationship, these two C-level executives are likely to find even more opportunities, together, to improve operational efficiency and organizational performance and reduce risks and costs.
An additional tip for the CFO: A productive partnership with the CIO can prove valuable in merger and acquisition (M&A) deals. Blending the IT systems and technology cultures of two organizations can be a resource-intensive and risky endeavor. CIOs are well positioned to see the big picture on IT and their insight can help to preserve deal value.