Until recent years, the relationship between the CFO and CIO was marked by mere coexistence. Yet, with the advent of migrating computing resources onto the cloud, a new relationship has been formed, a relationship that is now more aligned, more strengthened, and significantly more resilient.
The CIO’s responsibility has evolved beyond deploying, managing, and maintaining IT resources used by Finance organizations when required. Today, Finance has become more aware, involved, and more comfortable using technology, thereby becoming more autonomous, marking a new era in the dynamics between the CFO/CIO.
Historically, the CFO/CIO relationship was not only costly but also time-intensive. An organization required a massive investment in infrastructure and technical staff to host business applications on-premises. IT owned and supplied the share of the tools that Finance used by providing daily operations and technical support.
The CFO was forced to rely on the CIO because the CFO did not have the acumen to manage all the financial operations’ hardware and software. The CFO had no know-how about data integration, installation of applications, and software maintenance.
Then came a shift and a migration to the cloud of all finance applications.
A shift to the cloud meant that businesses now owned applications. Software applications no longer belonged to IT – they belonged to everyone. No one needed technical knowledge to manage information – it was set up and ready to be used by citizen users.
Businesses no longer require costly on-site IT teams owning or controlling their cloud-hosted financial systems. When a company moved to the cloud, the applications became owned by the business – not IT. This is how the IT department’s role has changed; companies are abandoning their previous systems for SaaS platforms, requiring a new type of IT assistance.
Once a company migrates to the cloud, Finance teams own the business applications they use, which significantly alters the CFO/CIO relationship.
Why a Cloud-based system results in a CFO/CIO relationship that is good for business
When businesses migrate their financial systems to the cloud, IT and Finance departments benefit from several factors.
Increased time to value
Cloud-based business solutions accelerate the time to value in Finance. As a result, Finance teams no longer require IT support to implement and get started with these solutions. The cloud offers them greater autonomy to move their workflows faster and with more efficiency.
Greater support for business processes
As CFO and CIO decrease their interactions with the cloud deployment, Finance departments can support business processes better; an organization using an app in the cloud can implement the solution without involving IT in any way.
The IT department benefits
The cloud streamlines operations to IT by reducing the IT’s responsibility of supporting financial applications. The more self-sufficient Finance becomes, technical support becomes less of a burden on IT. As a result, IT departments are not forced to be stretched beyond their capabilities.
Additionally, with most SaaS pricing models, the cost of leveraging a bespoke, enterprise-grade application is reasonably low. This means that IT costs are lowered because a business no longer requires expensive software, servers, or data processing equipment.
Financial systems that are hosted on the cloud offer CFO more independence. They accelerate time to value in Finance and provide far greater support for business processes. The evolved CFO/CIO relationship streamlines IT operations, thereby eliminating costly bottlenecks. Additionally, the cost of owning and operating an on-site IT department decreases because there are fewer hardware and software solutions that require IT support.
Creating a Stronger Relationship
An overlooked benefit of migrating to the cloud is the opportunity to build a stronger, more resilient relationship between the CFO and CIO. In 2016, the State of the CIO found only 31% of CIOs regularly collaborate with the CFO in smaller organizations, while only 19% do at larger businesses. This survey also found that CIOs and business leaders like CFOs do not always see eye to eye on IT spending. For example, IT and LoB leaders tended to agree about the top business drivers for technology investments in 2016, which then increased operational efficiency and improved the customer experience; however, they then diverged regarding security as CIOs ranked it higher than LoB leaders.
Analyst Bottom-Line
Today, many businesses have realized that a digital transformation is a must for their companies. A digital transformation helps IT and Finance collaborate better because technology sets a new playing field for the two organizations. With the CFO’s emergence and the focus on migration to the cloud, the CIO and CFO’s relationship is strengthening.
C-level execs will have to work in unison and coexist to fulfill the needs of the business in the future. Cooperation between CIOs and CFOs is becoming more robust, which strengthens the Finance department. It allows decision-makers to make the right choices in assessing which investment portfolios to move forward on. Migrating to the cloud is the next evolution to the Finance process. How is your Finance team managing on the cloud?
