Why IT and Finance Working Together is Crucial for Modern Businesses

To prepare for future growth and industry disruption, the CIO and CFO must find better ways to collaborate. IT has the potential to be a massive profit centre and prudent CFOs are always thinking about growing the business.

With more insight and transparency across both functions, Australian companies will quickly realise the profit potential of IT-finance collaboration.

Figure 5: How IT functions both a cost centre and profit centre.

Making both sides aware of the challenges and opportunities each business unit deals with is a good way to start the collaboration journey. Often, people across a business are very vocal about their IT capability without understanding the complexity of IT service delivery in general.

Examples of IT challenges:

• Communicating the importance of operations and spend. The business might not like paying for IT operations, but it is necessary to keep internal and customer-facing applications running. IT leaders have always faced an uphill battle convincing other business units of the value of IT solutions.
  
  
• Value in an on-demand world. IT staff are best positioned to get the most out of MSPs and cloud services. If finance wants to move to an opex model, IT professionals are still crucial to ensure SLAs are met and new technologies are delivering value.
  
  
• Unplanned external influences. IT is constantly challenged by a multitude of external factors which can disrupt the business. Everything from cyber security threats to product upgrades can disrupt a business and IT does not have an autopilot button.
  
  
• Proving the innovation potential. IT can work with service providers to develop new products and change the business, but some businesses do not view IT in this way. Using IT solutions to unlock innovation is a competitive advantage.

Examples of finance challenges:

• Reporting to the board. The board and executive team might not see the full value of IT as a strategic enabler. Finance will always be pressured to allocate the most appropriate level of funding to deliver the best outcome.
  
  
• Budgeting and forecasting. Using historical and market data to forecast financial performance is always a challenge. The accuracy of historical data and external influences can cause inaccuracies with modelling.
  
  
• Legacy systems. The finance function itself might be encumbered by legacy accounting and ERP systems. This does not make finance’s job any easier and (as we have noted) there is an opportunity for financial services solutions to help here.
  
  
• Compliance and regulation. CFOs cannot ignore their compliance and reporting obligations and even slight changes can greatly impact their workflow.

Quantifying collaborative outcomes

Ultimately, the CEO and executive team will appreciate any quantifiable results of communication and collaboration. The outcomes can be reported across several metrics including, operating cost reductions, increased efficiency, and new business opportunities.

Here are some examples of tangible outcomes of IT-finance collaboration and the quantifiable benefits they bring:

• Project visibility. Seeing something like an “IT project” within the business often misses the broader objectives of the project. Breaking down the siloes of departmental projects will help bring all stakeholders together for mutual benefit. For example, a project to extend the reach of the CRM system to field staff will be IT-driven, but also bring revenue-generating opportunities. The additional revenue generated by field staff is a measurable KPI.
  
  
• Collaboration. This might seem obvious, but many organisations are structured along departmental lines and do not meet with each other regularly. CIOs and CFOs (and their staff) should organise regular meetings to work together on a common cause. An example of this is having people from each department work in IT or finance for a few days to understand each other’s duties. Ideas to reduce waste and improve internal processes (for example, using apps to automate tasks) can also be quantified.
  
  
• Data lead business decisions. One thing that will increasingly unite IT and finance is data. As entire businesses become data-driven, IT’s data processing capability will be used to make more informed decisions across the organisation. Engaging with an MSP for market data forecasting is a good example of how data processing helps IT and finance. Better decision making based on real-time data intelligence can be quantified from both an opex and capex perspective.

Even in the most highly structured organisation, taking simple steps to overcome communicating challenges and working towards more collaboration will quickly deliver benefits.