CFOs and CIOs Must Work Together to Forge the Future of Finance
There has been much written about the need for collaboration among CMOs and CIOs, but technology writer Michael Krigsman writes that CIOs should also look to partner with CFOs to address a big opportunity for enterprise improvement.
“Although there is lots of discussion about the growth of technology budgets in marketing, finance is an upcoming opportunity forward-thinking CIOs,” says Krigsman in his June 22 Enterprise Irregulars blog post entitled: CIO opportunity: Step up and serve the finance department. “The time is now for CIOs to bond tightly with finance to help the CFO solve data problems and adopt a ‘digital mindset.’”
When it comes to Chief Financial Officers and their relationship with IT, “it’s complicated.” That’s the general assessment of more than 1,500 finance business professionals in 11 countries, who were interviewed by Redshift Research Ltd., for an Epicor Software research study.
One quarter of finance execs surveyed said their IT systems struggle to give them the info they need. CFOs said visibility of financial information is often less than perfect in many areas; only around half surveyed felt they have “good visibility” of financial information including: overall and business unit performance, product line performance and profitability, sales and labor costs, sales forecasts, raw material costs, and customer profitability; 1 in 10 said they have “poor visibility” in these areas.
Nearly one-third say their finance systems need updating, and 27% say investment in new IT is one of the top issues impacting their department in the next few years.
If unresolved, this issue is only likely to get worse, as the pace and volume of information critical to financial decision making continues to grow exponentially. Twenty-eight percent of CFOs polled cite Big Data as one of the top issues impacting the Finance department in the next two to three years.
Big Data in the office of the CFO is both a tremendous challenge and equally tremendous opportunity, providing the insights necessary to stay one step ahead of the business’ needs. Harnessing Big Data powers better planning and forecasting though data-driven budgeting, and rolling forecasts, and helps minimize risk and fraud, and support better financial modelling and variance analysis.
You can never have too much information; the key is being able to get that information quickly and analyze it to support smart, agile decision making. This is why analytics capabilities are so vital. But while the promise of analytics is huge, the reality is that CFOs are challenged via the lack of the right systems, tools and skill sets to make good on this promise. A tighter partnership between the CFO and CIO can help address this, bringing the critical competencies into the finance equation.
Who’s getting it right? Click here to learn about Aberdeen’s take on how leading organizations are succeeding in leveraging business analytics and ERP for improved profitability.