There is value in the CIO-CFO tech collaboration
Working out when to call an end to a system – and embrace the benefits – is up to the CIO ànd CFO.
The practicalities of a successful CIO-CFO technology collaboration were discussed during the webinar “CFOs and CIOs join forces: Execs shaping the future of value together”, sponsored by global technology platform Coupa.
Peter Truman, director at Global Technical Solutions Consulting at Coupa, kicked off the session by revealing how CFOs and CIOs can best work together to provide business and financial value through IT. “Even now, companies have computer rooms although most people expect to walk into a data centre and see nothing altogether (due to cloud migration),” he says.
He adds, “Many organisations say their existing environments constrain business change. As equipment gets older, risk gets higher There is significant operational risk in keeping on-site environments running, even though the costs associated with it are really low as maintenance contracts are relatively inexpensive and capital has likely been amortised.”
However, there is a difference between cost and value. Peter explains, “The ERP is a brilliant tool for financial reporting, but it is not necessarily adding value to business in terms of sales and marketing, process workflows, customer relationship and HR management.”
As a result, other platforms have emerged to augment ERP, which often fall short on data accuracy, user experience, and analytics.
Sandile Ntsele, CFO at Liquid Telecom, notes that IT now has two components: enablement and risk management.
“IT is not a cost centre as it has been in the past. It is a strategic partner of the business. It looks after customers, location of fixed assets and many other things. IT needs to be part of the executive committee and attend board meetings to understand the strategic direction of the company and the resources and systems needed to achieve this,” he says.
Sandile is of the firm view that migrating to the cloud is not an IT decision alone – it is a business decision that takes the overall strategic view of the organisation into account.
“IT enables the business to allocate capital appropriately into various parts of the business. So, instead of buying on-premise equipment, which is based on a capital model, it is better to move to an expense model of moving to the cloud. Thus, the relationship between CIO and CFO is massively important,” he says.
No longer a standalone
Storme McDonald is keenly aware of this, having previously held the role of CFO Corporate Banking at RMB and now leading CTOO Enablement at the corporate and investment bank.
“I have spent a lot of time in my finance career driving technology, pushing in robotics, shifting the skills set of the finance community. Technology doesn’t stand alone anymore, it is linked to an operating model along with the cost. It’s moved from being a cost centre to a business partner area,” she says.
Storme also mentioned a new trend currently taking place in companies, from CFOs taking on the CEO role. “That trend is now shifting, with quite a lot of CIOs becoming CEOS,” she says.
James Farnell, the technical operations team lead at the Flight Centre Travel Group, provided insight on the benefits of a CIO-CFO technology collaboration.
“Covid-19 wrecked the travel and tourism industry as we went into full state of hibernation. We have a lot less people and less money to spend and we had to figure out how to make it work. So, we took a global approach, with one enterprise tech team across the globe, placed into niched pillars. We are no longer viewed as a cost centre, as the pillars have become service providers to the business,” he says.
James adds, “There are definite benefits to CFOs and CIOs collaborating and making strategic decisions.”