Josh May, Consulting Manager EMEA, BlackLine
Relentless disruption has become the status quo for businesses in recent years. As a result, digital transformation is now an organisational imperative; but against the backdrop of a tumultuous economy, talent shortages and an increasingly fragmented workforce, it has never been more important for CFOs and CIOs to be on the same page when it comes to technological investments.
Historically, CFOs and CIOs haven’t had the strongest of relationships. But with digital transformation now dominating budgets, business success has become dependent on a collaborative relationship between the two. A recent Gartner study found that companies with a strong CFO-CIO relationship are 51% more likely to source the relevant funding for digital initiatives, 39% more likely to keep spending within the budget and, more importantly, 18% more likely to achieve their desired business outcomes. But what role does, and can, this relationship play in driving digital transformation efforts?
Collaboration is key in helping to drive automation
A key driver for businesses to advance their digitalisation journey is increased agility in the face of uncertainty. Unfortunately, 57% of CEOs surveyed in a recent KPMG study admit that their organisations do not have the capabilities and innovative processes in place to respond to rapid disruption. In order to successfully drive digital transformation, CFOs and CIOs need to collaborate to find more effective ways of working and align on solutions for optimising existing processes. Just as financial operations are not solely the CFOs responsibility, managing the data of the business cannot only lie with the CIO – both are shared responsibilities.
Companies that adopt and harness the power of automated digital processes are more likely to strengthen their own governance and compliance, in turn, reducing risk and saving valuable staff time. In addition, timely access to accurate data – more easily achieved when basic controls and processes are automated – can provide a strong foundation upon which critical business decisions can be more assuredly built.
Improved analytics to drive important business decisions
BlackLine research highlighted that 31% of respondents think it’s the CFO’s responsibility to guide their business through a recession and 32% believe this is the case through a period of inflation. For large businesses, decision making can now involve 7-figure sums and an ever-increasing level of risk. In this environment, having access to accurate, real-time financial data has never been more important. In fact, the same research found that 30% of finance leaders think being able to provide accurate data quickly enough to respond to market changes will be the biggest challenge their organisation will face in the next 12 months.
As a result of this growing reliance on financial data and analytics, the CIO’s technological expertise has become a vital asset for CFO decision making. A strong collaboration between the two branches can help provide both efficient and secure access to business-critical data insights, primarily through reporting. Strong data integration tools from across the business will enable CFOs to have a broader outlook on business operations, as well as market impacts and trends, making it easier to navigate the current economic climate.
Working together to enhance cybersecurity
It’s safe to say that managing cyber risk is a top priority for CIOs. The fragmentation of business operations – from the varying location of employees to the concurrent use of new and legacy technologies – has vastly expanded the attack surface for businesses. In fact, research suggests that the average cost of a data breach is now $4 million, revenue a company can seldom afford to lose – not to mention the impact such events have on reputation and share price.
Organisations that rely on outdated, manual and highly fallible technologies such as spreadsheets to house critical business data expose themselves to even greater risks. CIOs and CFOs need to align on technologies that bypass obvious security gaps. Together, they can help identify areas most at risk and implement the right technology where necessary. That way, organisations can be better protected against outside forces and can focus on driving their business goals.
Why now is the time to act
Recent IDG Marketplace research found that 82% of CFOs reported their experiences over the last 12 months have escalated their interest in modern accounting processes. The same research also highlighted that 94% of accounting and IT teams feel the time they spend on accounting, compliance and the financial close acts as a barrier to other strategic work they need to complete. By working in alliance, accounting and IT teams can redeploy capacity and hone their focus on the areas that are needed to drive transformation and growth. This begins with collaboration at the top.
In the modern business environment, the more we can build capacity for professionals across all branches of organisations to focus on strategic work, the more agile our organisations can become, making them better equipped to remain competitive in the marketplace. Whether it’s failed or over-budgeted transformation initiatives, non-compliance with accounting guidance and reporting requirements or higher maintenance costs, companies that aren’t prioritising collaboration are putting their organisations at risk. Getting out the other side is heavily dependent on strong internal partnerships, starting with the CFO and CIO.