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As IT gets away from being a cost center and becomes a creator of competitive market advantage, it’s more important than ever that CIOs and CFOs get along with each other and direct operations from the same playbook.
As we know, this is often easier said than done. The realities of who’s driving decision-making for IT and who’s handling the finance numbers can get in the way, because objectives can fundamentally conflict.
A recent Forrester study sponsored by SAP Concur found that 61 percent of firms believe IT is focused more on usability and employee experience and less on spending reductions. Conversely, 64 percent of companies contend that finance is focused more on reducing spending and less on usability and employee experience.
There are ways to overcome these obstacles, however. In this eWEEK Data Point article, SAP Concur offers some tips based on its research and industry knowledge to suggest greater collaboration between CIOs and CFOs.
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Data Point 1: Meet in the middle.
CFOs can benefit from bolstering their baseline IT knowledge, and CIOs can do the same about finance, empowering them to better decipher products that will drive the greater value to the business and not just offer a lower price tag. Additionally, they can appoint business analysts, who dabble in both IT and “finance speak,” to serve as liaisons between finance and IT units.
Data Point 2: Sit at the same table.
CFOs and CIOs bring their unique perspectives to each decision, and both need to be up for consideration–cultivating a more strategic partnership. In many companies, the CIO may work in the background providing recommendations and advice, while the CFO sits in the decision-making meetings. Being at the meetings together allows their perspectives to be heard equally, allowing purchasing decisions to be made equally to reduce spend together.
Data Point 3: Break down silos.
By increasing collaboration throughout the finance and IT departments, both will begin to understand each other better and consider cross-business priorities when making strategic decisions. Additionally, by having individual business units own their respective IT projects, they are responsible for their IT budget and proving the technology’s ROI. This encourages the entire company to make more strategic IT decisions.
Data Point 4: Focus on value.
CFOs want CIOs to ensure IT delivers value and demonstrates strong ROI, but articulating how IT investments create business value is no small feat. CFOs can help guide CIOs to evaluate technology from a business case standpoint. For example, CIOs should not just focus on the initial purchase cost but also include estimates for maintenance and upgrade costs, while also turning to IT industry benchmarks when a clear ROI measurement on a project cannot be made.
Data Point 5: Audit parties.
CIOs and CFOs should lead their respective teams to collectively audit current technologies within the organization. By performing this exercise together, current solutions are being evaluated from both a performance and financial standpoint. When identifying new solutions, CFOs and CIOs should consider choosing multiple technologies under one vendor to help centralize costs. Technologies that seamlessly integrate with each another will increase overall performance and give companies more greater value for their purchases.
Data Point 6: Better together.
A proper unified strategy satisfies the needs of both IT and finance stakeholders but doesn’t force either to sacrifice their own requirements. By identifying and prioritizing business objectives on shared outcomes, CIOs and CFOs can drive results that benefit everyone. In fact, Forrester found that 75 percent of companies with a unified finance and IT strategy report much higher levels of satisfaction with travel, expense and invoice management tools than those who don’t.
Data Point 7: Keep in touch.
In the past, IT expenditure involved large capital outlays for data storage, infrastructure and enterprise applications, and the switch to new infrastructure was lengthy and time-consuming. The transition to the cloud/ SaaS has changed that entirely. This more flexible IT, which runs on a “rent” versus “buy” financial model, means payments are spread out over time, and it’s easier for companies to switch vendors. This means CFOs and CIOs should stay in closer touch on pricing and ROI on an ongoing basis. Conducting regular meetings to review IT budgets can often result in cost-saving opportunities.