Why A Firm's Success Hinges On A Strong CIO-CFO Relationship By Mankiran Chowhan, Managing Director, Sap Concur India

Why A Firm's Success Hinges On A Strong CIO-CFO Relationship

Mankiran Chowhan, Managing Director, Sap Concur India | Tuesday, 20 August 2019, 06:20 IST

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Mankiran Chowhan, Managing Director, Sap Concur IndiaWith technology largely driving the company relevance and becoming a creator of competitive market advantage, it is impossible to separate technology from business strategies for organisations. It has become even more imperative for CFOs to collaborate effectively with CIOs. Their mutually beneficial partnership can help align IT investments with strategic growth plans and identify opportunities on delivering value to the business. It can also help to drive innovation, efficiency and growth.

The intra-organization hindrances faced while Tackling Obstacles to ensure effective collaboration between IT and Finance

The challenge in any organization, however, is to integrate the disconnected processes between technology and Finance. A recent Forrester study sponsored by SAP Concur found that 61% of firms believe IT is focused more on usability and employee experience and less on spending reductions. Conversely, 64% of companies state that Finance is focused more on reducing expenses and less on usability and employee experience. While addressing these differences, enterprises need to work towards an IT- Finance collaboration in order to drive prime business outcome.

CIOs and CFOs need to be able to ‘speak the same language’, and to be able to do that, enterprises need to build a compatible team culture that fosters understanding and communication. Functions in organizations which have pursued narrower goals in the past with employees of individual functions working in silos, building walls between departments have only widened the space between finance and technology. These gaps arise from traditional reporting structures which are not aimed at cultivating close collaboration between finance and technology teams.

“For organisations to succeed and stay ahead of the growing needs of their customers, CFOs and CIOs need to thoughtfully look at fostering productive collaboration with one another”

According to a report published by EY, 61% of CFOs state that while their collaboration with the CIOs has increased over the past years, insufficient understanding of IT issues among finance executives remain a main barrier to closer collaboration between the two teams. The report brought to light other issues such as absence of a clear set of key performance indicators (KPIs) that link financial performance to the IT agenda; incompatible processes across two functions; lack of finances, and organisational structure act as the primary reasons that hinder a healthy collaboration between the two C-suite peers.

The paramount need for an efficient CIO-CFO collaboration:

Leadership teams of leading global firms can reap remarkable benefits arising out of the CIO-CFO collaboration. The benefits include:

• Faster reaction to market dynamics

• New customers acquisitions in current market

• Positive business outcomes resulting in strategic investments in emerging disruptive technologies

• Increasing profit, sales, value and reducing overall costs

The report also revealed that CFOs consider that their contribution to IT has been most valuable in managing cost and profitability, setting budgets, building business cases for new initiatives, financing, performance measurement, value realisation and change management.

This finding is of utmost significance, especially in the Travel and Expense (T&E) industry where the traditional way of processing business travel and expense reimbursements is time-consuming and demands manual interference. For organisations in the T&E space, it is essential to automate the finance and expense management in order to make the process more streamlined, efficient and error-free. By automating each phase of business travel with the help of Artificial Intelligence (AI) and Machine Learning (ML) - such as pre-approvals, flight and hotel bookings, on-tour support, post travel reimbursement, analysis and expense reporting – organisations can help alleviate a greater part of manual work for the employees in finance and customer support teams. For example, an advanced automation tool such as AI or ML drastically reduces the amount of fraud during reimbursements submissions with the help of advanced language processing and precise translation. It automatically turns photos of receipts and validate legitimate expenses from fraudulent ones, preventing deliberate misuse of claims. Combined with predictive analytics, AI can predict travellers’ choices and behaviours, provide an in-depth analysis of their spending pattern, and recommend personalized suggestions – thus offering travellers unmatched travel experiences.

In today’s technology-driven world, organisations are driving significant performance improvement through a range of IT initiatives from harnessing the power of AI, ML and Big Data to transform decision making and enhance the customer experience. Bold technology investments teamed with business strategy is effective in managing a series of events such as data privacy and cyber risks. As technology evolves at a fast pace, CIOs need to harness disruptive technologies to ensure essential domains in an organization such as analytics, digital, security and cloud are not compromised while driving business outcomes. This is also predominantly true for critical finance-related functions such as expense management and payroll. As a result, CFOs and CIOs are increasingly exploring strategic activities such as-building an analytics-driven organisation, enhancing employee safety, managing cybersecurity, creating information architecture and processes, and transitioning to a digital technology function to scale operations and keep pace with the growing demands of businesses.

For organisations to succeed and stay ahead of the growing needs of their customers, CFOs and CIOs need to thoughtfully look at fostering productive collaboration with one another.

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