CFOs have to keep the numbers in mind, but there must be more to the process of digitalization than just financial benefit.
For old school IT leaders, trying to sell an IT project to the CFO was a dreaded experience. Not much has changed: Discussions with the CFO at budget time continue to be challenging. It’s not that CFOs are opposed to IT, but IT professionals without financial backgrounds fear they won’t be able to adequately answer the CFO’s questions about capital expenditure amortization, return on investment (ROI), and other financial topics.
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This is why some CEOs I know encourage their non-financial executives to educate themselves or to take a course in financials.
On the CFO side, human resources and career development professionals urge CFOs to broaden their visions to the strategic and business value of technology investments, and not just to the dollars and cents. “We’re entering a new era where the requirements of today’s CFO are ultimately more diverse, complicated, and sweeping,” said Brent Longval, CFO at Marketing Architects, an advertising agency. “We are expected to not only provide counsel to the CEO but to perform a key role in identifying strategic growth opportunities for the business.”
Digital transformation has been a major technology area where CFOs are playing an active role.
“As a CFO, I think about return on investment, but I also think about how we as an organization can maximize and leverage the data that we are digitalizing,” said Gina Mastantuono, CFO at ServiceNow, which provides a cloud computing platform that helps companies manage their digital workflows. “I have to understand how digital technology works, but also ask business value questions, such as, ‘If we put in a human resources recruitment and talent management system, will it lower our rate of employee attrition? How will this system drive the bottom line?'”
Mastantuono is adamant about digitalization’s potential to eliminate departmental data silos—but she also fights the silo battle by actively collaborating with IT and other business units in every phase of digital transformation projects—from project inception to budgeting through execution and delivery of results. This is an exercise that breaks down departmental silo walls.
SEE: The CFO’s guide to data management (TechRepublic)
“Building cross-functional collaboration is a critical skill, and a major key to this is a collaborative relationship between the CFO and the CIO,” said Mastantuono. “By aligning finance and IT on the strategic value of digitalization projects, we can maximize their value to the business.”
As a CFO, Mastantuono is aware that she has the power to greenlight projects and innovations. Central to the process is keeping a finger on the pulse of the business, and regularly communicating with digitalization promoters in IT and throughout the business.
“The future of finance encompasses the transformation of people, processes and systems,” said Mastantuono. “As part of this process, the goal of digitalized data should be that the right information gets to the right people at the right time. This enables the business to be proactive for the future and responsive to the present. To do this, the CFO must play a strategic business role in digitalization and other initiatives.”
CFOs like Mastantuono should be a breath of fresh air to IT and business champions of digitalization, because they encourage and welcome proactive collaboration with CIOs on digitalization and other projects from start to finish. Besides, the more effectively CIOs and CFOs collaborate throughout the lifetimes of projects, the easier it will be to get projects to market quicker, and the greater the probability of positive business returns for companies.