10 years, 10 months ago

A Message From The CFO… Help Me Help You!

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By: Ben Geller, VP Marketing, Troux

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In a recent Wall Street Journal – CFO Journal blog, James Wilmsen, CFO for cloud service provider XIOLINK stated “I am often surprised by how infrequently, if at all, the CFO is engaged when a company is evaluating [technology]. Many times CFOs take a back seat to the CIO or IT manager despite the inherent financial and strategic implications when evaluating investments in technology and IT services. However, the insight of a CFO can be critical in evaluating and choosing the right [technology].”

In essence, on behalf of CFOs everywhere Wilmsen is sending a message to their CIO counterparts… Help me help you!

Working in concert with CIOs and IT managers, Mr. Wilmsen believes CFOs can help IT leaders make the right decisions. He postulates there are a number of ways a CFO can add value to the technology evaluation process. A few of these are listed below.

1) CFOs can help evaluate risks. “As the chief steward of the company’s assets, both tangible and intangible,” it is critical the CFO understand the what, how, and where of a new technology investment. Mr. Wilmsen suggests “a series of meetings with the executive team of the [technology or IT Services] provider can uncover any concerns or potential issues which may later manifest themselves as poor service levels. Establishing a relationship and dialogue with them early in the process can pay dividends as the relationship grows and expands.”

2) CFOs can anticipate the potential return on investment. “The CFO is responsible for evaluating investments and processes to ensure they enhance profitability and achieve an expected return on invested capital. The right technology contributes to both arenas. Good technology, closely aligned with the needs of the business, is a long-term undertaking, requiring constant nurturing and adjustment. An investment in an initiative today could look very different tomorrow based on a changing competitive landscape, customer needs, and capital market factors. It is important that the CFO understands this dynamic and, along with the CIO, understands how an investment of time and resources with the right service provider can provide the enhanced level of flexibility desired.”

3) CFOs can help identify the organizational impact of technology change. According to Mr. Wilmsen, “at its essence, technology exists because of its ability to alter a process.” It allows leadership to “look at the chessboard of organizational capabilities and consider moves and outcomes which otherwise would not be available. The CFO should be aware of this change in process and ensure the change is one that positively impacts the bottom line, both in the near and long term. Nothing is more aggravating to a CFO than having to reinvest in technology without understanding why the previous investment did not work or why it did not last as long as proposed.”

4) CFOs can help ensure technology investment will lead to business improvement. In his blog Mr. Wilmsen writes “at the very heart of it, the CIO and the CFO have the same goal: to sustain, protect and grow the business. The CFO wants to make smart investments that enhance the value of the business. And the CIO knows that implementing new technologies with the right strategic partners can quickly impact revenue growth and enhance profitability, sometimes simultaneously. Aligning on project goals, timelines and projections increases the likelihood of a successful project, which is felt across the organization.”

In his conclusion Mr. Wilmsen states “the CFO’s involvement in the [technology] evaluation process is not done to alter the CIO’s responsibilities. Good CFOs know that IT is the CIO’s world, the one they live in every day. However, technology increasingly permeates all facets of the organization at a blistering pace. As a result, the opportunities associated with [new technologies and IT Services] begin to fall within the purview of the CFO. Because of this, a CFO who works as a partner in the process can make the job easier.

Hopefully more and more IT leaders will heed the CFOs request to “Help me help you.” And when they do, IT and Strategic Planning executives need to be prepared to work side-by-side with their CFO counterparts by delivering the IT transparency needed to make important decisions. Enterprise Portfolio Management (EPM) solutions can help deliver that transparency by showing CFOs how IT resources are spread across the enterprise, illustrating their connection to corporate goals, strategies ,and key business processes. EPM also enables leaders to identify which assets are needed and which are not, guiding them down a path to retire what’s not needed quickly and safely. In short, EPM solutions can yield the decision-making insights that help all executives help themselves.