Some top leaders have often said, “If you want to go fast, go alone. If you want to go far, go together.” As a CFO or an accounting firm leader, this is a quote that might be extremely relatable to you. The responsibility of a CFO isn’t limited to taking care of the finances of the organization and making sure that the stakeholders are making the correct decisions. It is so much more than that. The faces with these titles also act as the bridge between the associate-level accountants and the C-suite. The way accounting businesses operate has changed massively in the past decade or two.
89% of the senior executives, in a recent study by Forbes, acknowledged that there have been several barriers that keep CIOs and CFOs from collaborating closely on IT transformation.
Earlier everyone worked as an individual contributor. But today, there is an increasing need for the CFO to collaborate with the C-suite members, especially the CIO. Technology has been playing an incredible role in that. The CIO and the CFO always had to work together, but they did so in their own way. While the CIO sought money to materialize initiatives, the CFO was essentially the gatekeeper of the budget. While that relationship will continue to exist, digitalization and technology has made the conversation broad and deep.
Understanding the Relationship Between the CIO and the CFO
The CFO and CIO should be two of the closest-knit entities when it comes to driving efficiency, implementing organization-wide solutions, or reducing risk altogether. Their relationship represents the crucial intersection between finance and technology. Although in the past, their conversations might have been limited to the budget approvals for IT projects, in the digital era, it goes beyond the traditional budgetary bargains. Today, the CFO relies on the CIO to provide strategic guidance on technology investments, that align with the firm’s needs, and short-term and long-term goals. They walk each other through the complications of digital transformations, leverage innovative technologies to drive operational efficiency and enhance the use of data. The CIO’s expertise in technology and infrastructure complements the CFO’s financial knowledge and experience.
How has tech helped improve the relationship between the CIO and the CFO?
A strong relationship between the CIO and the CFO is not just an operational aspect, in fact, it is cultural. Using technology to nurture the relationship encourages two-way communication and breaks down the silos between operational processes and internal working systems. Here are the top ways how the use of tech ensures close collaboration between both parties:
Strategic Tech Planning:
In accounting, the use of tech is key to the success of the business. By leveraging tech for predictive analysis and scenario planning, the CIOs and the CFOs can not only assess the impact of technology investments but also make amendments to an incorrect decision before it is too late. The collaborative approach ensures that the tech initiatives are well-aligned with the interests of all parties – the organizational stakeholders, the clients, and the employees. Using tools for strategic tech planning also plays a key role in ensuring that the leaders are prepared for what may be the future. We live in times of uncertainty and this is key.
Real-time access to data:
We know how important it is to use data for all aspects of the business. There are many tools available for advanced analytics and reporting. They provide real-time access to financial and operational data for both the CIOs and the CFOs. With shared analytical platforms and dashboards, there is no need to seek data from each other. Viewing it all in the same place and making informed decisions collaboratively becomes easy. It also gives access to a unified understanding of the organization’s performance metrics, financial health, the implications of the decisions made so far, forecasting for the future, and technological requirements. This helps build transparency, and trust and enables the CIOs and CFOs to work together towards success.
Integrating the financial and IT systems:
Technology has helped make the lives easier for accounting professionals across all levels. CFOs are no exception. By using tech, organizations can seamlessly integrate financial and IT systems to build a rapport between the two departments. Shared platforms for financial management, enterprise resource planning, and IT infrastructure allow CIOs and CFOs to work closely on data management, budgeting, resource allocation, and forecasting. This alignment is extremely important as it helps the stakeholders plan ahead and well for the future while making critical financial decisions.
Cost optimization and risk management:
Technology has helped lead accounting firms from the front. It plays a key role in cost optimization and risk management. This is a mutual area of interest for both CIOs and CFOs. Through tools that help in cost and risk analysis, you can identify opportunities to avoid unfortunate financial scarcity or any other forms of risk. These tools are also useful in mitigating cybersecurity risks and ensuring that you comply with the regulatory requirements. By working closely, CFOs and CIOs can strengthen the organization’s financial resilience and operational efficiency.
Shared accountability:
Both the CFO and the CIO lie in the position of power. And with great power comes great responsibility and accountability. These roles need to remain aligned and accountable for the business outcomes. And the alignment should start early on – from technology investment, financial performance, and strategic objectives, it is important to set a common goal. The shared accountability encourages open communications and instills mutual respect and a culture of collaboration. This not only empowers the individuals in these roles but the organization as a whole. Being accountable also encourages the ability to make quick changes.
Accounting is a niche industry that deals with critical information. A strong relationship between the CFO, the CIO, and other C-suite leaders helps firms stay on track with their trends, finances, expenses and so much more. A key part of the CFO’s role is to bring everyone together on the same page and translate complex goals into simple, understandable items. It is all about painting the financial picture right so that the decision made can be accurate. When other stakeholders and decision makers like the CIOs, CTOs, and CEOs work along with the CFOs, the gap can significantly reduce and the decisions can be made quickly and accurately. As the responsibilities of the CFOs and the finance teams continue to broaden, and the cross-functional dependencies continue to increase, this collaboration can go a long way, building a smooth financial journey for all parties involved.
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Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
