In the past, there was little opportunity for close collaboration between the functions of finance and IT. Now, however, they routinely work together to create high-value, strategic projects for the organization. As organizations implement new technologies and launch digital initiatives meant to modernize or wholly transform their operations, effective finance and IT collaboration can help to assure that the organization realizes positive outcomes from those investments.
According to Jim Caci, CFO of software-as-a-service (SaaS) and data management platform provider AvePoint, the collaboration between finance and IT is essential for any company looking to grow. He goes on to say that, in his opinion, the partnership between IT and finance, should be expanded to include more than just organizational proximity and instead be intrinsically integrated.
“When [finance and IT] work together to evaluate the business case for a new investment, it ensures the CFO and the rest of the finance can provide strategic advice and act as more than just the budget gatekeeper,” said Caci.
This collaboration may include a unified cost and projected benefit analysis and an evaluation of the risks and rewards of a proposed investment. Because of this, the decisions that IT and finance make jointly tend to be more strategic than task-oriented.
A partnership that can yield many business benefits
When the CFO and CIO collaborate, it can improve the alignment of finance and IT agendas, strengthen change management initiatives, lower risk, and, of course, promote effective finance and IT collaboration. A close collaboration between these two C-level executives and their teams can benefit the organization in the following ways:
Streamlined processes and cost savings - Finance can benefit from the IT department's expertise in evolving systems and solutions in identifying new applications for boosting productivity. For instance, software that automates regulatory compliance tasks can free up time for employees while lowering errors that can be quite expensive. In addition to streamlining business procedures, this also frees up their time to work on more strategic initiatives and increase client satisfaction.
Better use of data - CIOs are often instrumental in evaluating and implementing business intelligence (BI) and other advanced data analytics tools. They provide feedback on these decisions so that the company — and the finance function — may invest in solutions that can provide the types of reports and insights that the company — and the finance function — require. The CFO's participation can also help to guarantee that new tech tools and services increase data accessibility for all authorized business users so they can directly work with data and add greater value to the organization without IT’s ongoing assistance.
Enhanced data security - In the finance industry, protecting client data and proprietary information is essential, especially as businesses increasingly rely on technology for day-to-day operations. Bringing IT and finance departments together helps avoid time-wasting redundant operations by having both teams operate as one to meet compliance requirements and handle cybersecurity concerns. IT can also instruct finance departments on how to better safeguard sensitive data.
Strategies for jump-starting Finance and IT collaboration
If you, as a finance leader, aren’t yet collaborating with your counterpart in IT, now is a good time to start building that relationship and laying the groundwork for effective teamwork between the finance and IT departments. It won't be long before your company needs to collaborate with IT and finance to carry out a digital project successfully. So, the following are some strategies CFOs and CIOs can use to promote collaboration amongst their departments:
Invite staff to make suggestions. Asking for their suggestions is one method to urge the finance and IT teams to consider how and why they might collaborate. They might already have some ideas, perhaps even ones you hadn't thought about. By asking their opinions, team members will feel more involved in the process and more enthusiastic about working together. Consider meeting with each group individually first, and then bringing everyone together to
Don’t wait for a major project to arise. If at all feasible, refrain from launching finance and IT partnerships with a mission-critical project. Setting deadlines and telling teams to "work together" is not enough, and disaster might easily result. Instead, begin bringing your teams together in the workplace by letting them know what each group is working on and how its aims affect the overall objectives of the company. Two great ways to provide finance a peek into the world of IT and vice versa are mentoring and job shadowing programs.
Invest in team-building efforts. Employees that get along well and are familiar with one another make for better teams. So, consider organizing team-building events inside and outside of the office to break down silos, build rapport between the finance and IT departments, and ideally, enhance employees’ knowledge and skills. One suggestion is to organize a relaxed, catered lunch or brunch on-site, inviting both departments to partake in delicious food and engaging conversation before listening to a great keynote speaker. You could, for instance, invite a digital transformation specialist to speak on how technology is altering the nature of work in IT and finance.
Finance and IT: Help Me Help You
IT can assist Finance with Business Reporting
Collaboration that is efficient and productive is more crucial than ever as businesses switch to hybrid work models. Implementing financial reporting software is one of the ways IT may support the development of finance. This type of software enables forecasting of KPIs like sales and profit in addition to keeping everyone informed wherever they are. Internal stakeholders can learn how the company is tracking its goals with the use of dashboards and other reporting tools.
IT can assist Finance in securing sensitive financial records
Another way that IT assists Finance through collaboration is by securing sensitive records. Your organizations IT department is responsible for securing all the company’s sensitive data. All organizational data is sensitive, but it is especially critical that the IT team collaborates effectively with the finance department to make sure that all financial sensitive data is secure. Studies show that phishing cases are exponentially rising, and organizations cannot risk any downtime that could occur from this. Organizational downtime is a finance team’s worst nightmare, as there is no cash flow while you are not operating.
Finance can assist IT with Budgeting and Forecasting
Next, let's touch on a way that finance can assist IT. To maximize development and operational efficiency, organizations must prioritize budgeting and forecasting. Because finance departments are specialists in budgeting, they can help the IT team design a budget that complements the goals of the company. Organizations should try to allocate their IT spending in a way that will enable them to offer their customers better service and make their staff more productive in how they deliver that service by working together to develop successful budgets.
IT can assist Finance with Automation
Automation allows IT and Finance to work together as well. These days, automation is capable of amazing things. It doesn't matter if it's contract approval workflows, electronic document signing, expenditure reporting, or something else—automation may free up the finance department's staff from some of the daily, boring chores they would otherwise have to complete. The finance team can now use the time that has been freed up to foresee business demands and better position the company for the future.
Finance can assist IT with presenting ROI to internal stakeholders
Finally, one more way that Finance may help IT is by working with it to calculate ROI when pitching new ideas to internal stakeholders. Because two are more powerful than one, their combined message will carry more weight when presented by two leaders. Board members who are less technical and may not comprehend why the IT department would require additional funding can benefit from the ROI provided by the finance team.
Collaboration inside the organization is essential to ensuring corporate expansion. The importance of this coordination between the IT and finance teams cannot be overstated; having everyone on the same page makes the organization more ready, secure, and effective.